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State of the World 2004
Rethinking Consumption:
From Wealth to Well-beingGary Gardner, Erik Assadourian, and
Radhika Sarin
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The Consumer Society
A society in which acquisition and
use of goods and services is the
principal cultural aspiration and thesurest perceived route to personal
happiness, social status, and
nationalsuccess.
Paul Ekins
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Three Points
Consumption has the character of arunaway train in much of the world
Current consumption patterns have agrowing dark side for individuals,societies, and the planet
A different model of consumption isavailableone that can deliver ahigher quality of life
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1. The State of Consumption Today
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Private ConsumptionExpenditures, 2000
Sub-Saharan Africa 11% 1%
South Asia 22% 2%
East Asia & Pacific 33% 21%
Western Europe 6% 29%
U.S. & Canada 5% 32%
% of WorldPopulation
% of WorldConsumptionExpenditures
Selected Region
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Distribution of GlobalConsumer Class, 2002
0
500
Mil
lionConsumer
s
WesternEurope
349
20%
East Asia& Pacific
494
29%
South Asia
141
8%
1000
IndustrialCountries
912
53%
DevelopingCountries
816
47%
World total =1.7 billionconsumers
U.S. &Canada
271
% of World Total% of World Total: 16%27%
(other regions)
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Global Consumer ClassSelected nations, 2002
Millions of People
United States
China
India
Japan
Germany
Brazil
Russian Federation
243 Million (84% of population)
240 M (19%)
Consumer class
122 M (12%)
121 M (95%)
76 M (92%)
61 M (43%)
58 M (33%)
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Car Growth in China
0
50
100
150
200
1980 2000 2002 2003 2015
Year
MillionsofC
ars
510 14
150(e
st.)
~ 0
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What drives the appetite forconsumption?
Physiological Drives- Survival instinct: natural impulseto alleviate discomfort (hunger,cold, etc.)
- Means of expressing social identity
- Seeking comfort, style, and status
Social and Psychological Needs
- Increase in production efficiency =
greater availability of goods
Large Supply of Goods
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What drives the appetite forconsumption?
Globalization- Reduction of tariffs and cheaplabor = lower costs, moreaffordable products
- Increased distribution and expanded
markets
Cheap Energy and Transportation
Technological Innovations
- Greater capacity to extract rawmaterials and resources at lower
cost (i.e., fishing trawlers)
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Business Practices toStimulate Consumer Demand
BillionDollars
(2001do
llars)
Global and U.S. Advertising Expenditures, 1950-2002
Advertising- Pervasive in commercial broadcasting,print media, Internet
- Product placement in movies, TV programs
0
100
200
300
400
500
1950 1960 1970 1980 1990 2000Source: McCann-Erickson
United States
World
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Business Practices toStimulate Consumer Demand
Credit Cards- Consumers can purchase goods
beyond their means
Government Policies
- Economic subsidies affect
consumption patterns
- Ex.: subsidies for suburban
homebuilding lead to demand for
household goods, cars, roads,
etc.
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2. The Dark Side of Consumption
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The Dark Side of Consumption
Huge amount of consumerwaste
Unlimited consumption at oddswith patterns in natural world
In nature, no worthless waste,all matter reused or recycled
Natural areas under
stress
- All the worlds ecosystemsare shrinking to make wayfor human development
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Global Living Planet Index
Tool developed by World
Wildlife Fund (WWF)
International to measure
health of natural systems
(e.g., forests, oceans,freshwater systems, etc.)
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Economic Activity andEcosystem Health, 1970-2000
0.0
1.0
2.0
3.0
1970 1980 1990 2000
Source: Maddison, IMF, UNEP, WWF, RP
(1970
=
1.
0)
Gross World
Product Index
Global Living
Planet Index
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The Personal Toll
61% of Americans with creditcards carry a balance, averaging$12,000
DEBT
Americans work the equivalent of9 weeks more each year than
Europeans
TIME
65 % of American adults areoverweight or obese
HEALTH
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Wealth vs. Well-being
Once basic needs are met, affluence
and the accumulation of goods do
not necessarily correlate with a
higher quality of life
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Average Income and Happinessin the United States, 1957-2002
0
5,000
10,000
15,000
20,000
25,000
1957 1967 1977 1987 1997
Source: Myers
A
verageIncom
e
(1995dollars
)
0
20
40
60
80
100Perc
entofPeople
"V
ery
Happy"
Average
Income
Very Happy
People
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3. A New Model is Possible
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Well-being Index
Tool developed by Robert Prescott-Allento measure societal health
Uses 87 different indicators to measurehuman and ecological well-being
e.g., Life expectancy, school enrollmentrate, extent of deforestation, level of carbon
dioxide emission, etc.
Values for indicators are standardizedand summed into a single score
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0
20
40
60
80
100MaximumScore
Human WB Enviro WB Total WB
(Rank out of
180 countries)
Sweden(1st)
79
49
64
Benin(47th)
27
71
49
Saudi Arabia(176th)
3123
27
Well-being (WB) Ranking(selected countries)
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0
20
40
60
80
100MaximumScore
Human WB Enviro WB Total WB
(Rank out of
180 countries)
Sweden(1st)
79
4964
Netherlands(24th)
78
22
50
United States(27th)
73
31
52
Rethinking Progress
Similar Human WB,
but differentEnviro WB:
How a nationmeets its
development goals
as important aswhetherit meets
them
T d I f t t
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Toward an Infrastructureof Well-being
PhysicalInfrastructure
e.g., urban planning, masstransit
PoliticalInfrastructure
e.g., subsidies, taxes, laws onworking hours
CulturalInfrastructure
e.g., harnessing advertising,improving education
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Getting to the Good Life
New emphasis for economy: to create societies with a higher
quality of life
to live in harmony with naturalenvironment
to facilitate healthy choices
to tend to the basic needs of all
Current economic goal ofunlimitedconsumption is unsustainable
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More information onState of the World 2004
at www.worldwatch.org