The ISEW is one of the most advanced attempts to create an indicator of economic welfare.
It is an attempt to measure the portion of economic activity which delivers genuine increases in our quality of life - in one sense 'quality' economic activity.
For example, it makes a subtraction for air pollution caused by economic activity, and makes an addition to count unpaid household labour - such as cleaning or child-minding.
It also covers areas such as income inequality, other environmental damage, and depletion of environmental assets.
View our step by step explanation of the terms
However, this is not a simple process - for ISEW is still an economic measure, and to make these corrections financial costs have to be assigned to non-financial impacts such as climate change and ozone depletion.
This problem has been noted by some commentators - who say that the use of such 'non-statistical' judgements invalidates the utility of ISEW.
However, this is even more of a problem for GDP when it is used as an indicator of progress - for its own value judgement is that these adjustments be set at zero.
We feel that there is nothing inherently wrong in using values to construct indicators - for national goals for progress are similarly based on values not statistics.
However, it is fair to suggest that currently the weightings used in the ISEW could be arbitrary, or reflect the prejudices of the Index's creators.
But it is less reasonable to suggest, as ISEWs critics do, that if the assumptions built into the Index were changed then a very different index would appear.
We aim to address these concerns on this site by showing the assumptions in the ISEW, and allow users to change these assumptions to create ISEWs of their own.
We hope this will show the ISEW to be relatively robust, that users' comments can highlight areas where improvements can be made, and that the values people choose can start to highlight which are the most important areas to be covered in any national indicator of welfare.
There are 19 adjustment terms built into ISEW. See how these factors affect the value of ISEW as plotted against GDP, and read an explanation of the different terms.
Introduction | Replacing GDP | ISEW explained | Make your own ISEW | View the results | International examples | How ISEW terms are calculated