Incorporating resilience in the assessment of inclusive wealth: An example from South East Australia

Brian Walker, Leonie Pearson, Michael Harris, Karl Göran Maler, Chuan Zhong Li, Reinette Biggs, Tim Baynes

Research output: Contribution to journalArticlepeer-review

110 Citations (Scopus)


This paper explores the consequences of changes in a system's resilience on the sustainability of resource allocation decisions, as measured by Inclusive Wealth (IW) (Arrow et al. in Environ Resour Econ 26:647-685, 2003). We incorporate an estimate of resilience in IW by taking account of known or suspected thresholds that can lead to irreversible (or practically irreversible) changes in the productivity and value of assets and hence social welfare. These thresholds allow us to identify policies or projects that may be leading to an increased risk of decline in capital stocks (the wealth of the region). Such risks are not reflected through usual measures of current system performance, e. g. agricultural production. We use the Goulburn-Broken Catchment in south-eastern Australia as a case study to explore the significance and practicality of including resilience in inclusive wealth estimates.

Original languageEnglish
Pages (from-to)183-202
Number of pages20
JournalEnvironmental and Resource Economics
Issue number2
Publication statusPublished - Feb 2010
Externally publishedYes


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