Recent recessions have set the state’s economy farther back than what official measures are showing, according to a new indicator from a progressive-leaning economic policy group.

The Colorado Fiscal Institute has crafted the Colorado Genuine Progress Indicator or CO-GPI as an alternative to state gross domestic product (GDP), which measures the value of goods and services produced in an economy.

“GDP is a great measure of output but not a good measure of economic well-being. And it doesn’t tell anything about sustainability,” said Chris Stiffler, the CFI economist who designed the CO-GPI.

Between 1960 to 2011, Colorado GDP tripled, but the CO-GPI only doubled, adjusting for inflation and population growth. In 2011, per capita GPI in Colorado stood at $20,197, versus per capita state GDP of $40,206.

The CO-GPI, which tracks two dozen items, tries to make a distinction between productive spending, like college tuition, and defensive spending, like rebuilding homes destroyed in recent wildfires.

That involuntary spending boosts GDP. But, as with money spent to fix wrecked cars or replace stolen goods, it isn’t a good foundation for economic growth, Stiffler argues.

And GDP doesn’t capture many beneficial activities. For example, volunteers in Colorado contributed labor worth about $2.3 billion and unpaid household work was worth about $26.8 billion in 2011.

Conversely, workers sidelined by the bad job market lost $8 billion of potential wages, while longer work schedules cost those who kept their jobs about $12 billion in lost family time, declining health and other hidden costs.

Independent Denver-area economist Gary Horvath said GPI is useful but won’t replace GDP.

“There is value in trying to provide metrics for social and environmental issues, just as there is value in calculating the GDP,” Horvath said

Measures that go beyond the raw numbers, while useful to spark discussion, require making more judgment calls, he said. The new index deducts for longer commute times, but a worker might value the trade-off if it provides more living space and a lower mortgage payment.

Stiffler said the index reflects progressive concerns, like income inequality, and environmental ones, like pollution, but also includes issues of value to social conservatives — such as the cost of divorce, lost family time and rising crime.

The CO-GPI shows the last two recessions were more disruptive than what traditional measures have captured. In 2011, the Colorado economy was at 2004 levels, measured in per capita GDP, but only at 1999 levels when using CO-GPI.

A handful of states, including Maryland, have adopted GPI measures.

Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi