In defence of the dollar - why impact measurement needs a common denominator

Discussions of whether or not one type of impact analysis - economic, social, or environmental - deserve precedence over the other are ill-founded and miss the fact that all three are necessary to inform good decision making and each other.

That said, economic analysis carries obvious advantages, being a robust way to weigh the impacts between different physical, financial, and subjective intangible effects for individual people, and then weight the balance of those effects between people. That dollars are only a convenient, but arbitrary, yardstick of relative preferences and therefore well-being is aside to the actual aims of economic analysis. Albeit one often poorly explained by economists, and therefore, commonly misunderstood by non-economists through no fault of their own.

Sparowly Group’s Senior Economist, Sam Miller provides a explainer to help demystify misperceptions.