3.3 Living Standards and its Indicators - Composite Indicators Flashcards
1
Q
List the various composite indicators and describe them.
A
- Human Development Index (HDI) measures the average atainment of a long and healthy life, knowledge and a decent material SOL
- Measure of Economic Welfare (MEW) adjusts measures of total national output such as GDP and GNI by adding the value of leisure and of transitions in the underground economy
- Index of Sustainable Economic Welfare (ISEW) balance the GDP with income distribution, costs related to pollution, environmental damage and resource depletion
- Your Better Life by the Organisation for Economic Cooperation and Development (OECD) attempts to measure welfare based on what people perceived to be important to them, by measuring: income, employment, housing, health, social relationships, education, environment, the administration of institutions, security, genera satisfaction and work-life balance
2
Q
What are the limitations of using a composite indicator to measure SOL?
A
- Difficulties in determining the weightage of each aspect considered in the composite indicator
- Subjectivity of what aspects determine overall welfare
- Economic growth and economic development are not the same, where economic development is more inclusive as it takes into context social and political conditions
