Evaluations of Some Measures + Indices of Social + Economic Inequality Flashcards
What e.g.s help measure economic inequality?
- GDP (per capita)
- GNP
- GNI (purchasing power parity)
- Gini Coefficient
What is GDP (gross domestic product) per capita?
- measure of total value of goods + services produced within a country, divided by its pop.
What are the strengths of using GDP per capita as a measure of economic inequality?
- allows simple + direct comparisons of avg. income between countries of diff pop. sizes
- reflects eco. output, as countries w higher GDP per capita generally have better access to good + services, better infrastructure + an overall better economy
What are the limitations of using GDP per capita as a measure of economic inequality?
- doesn’t account for income distribution within a country + so masks extremes
- doesn’t account for non-market activities (e.g. work done at home/volunteering/caregiving)
- doesn’t account for informal sector (e.g. local goods + services) which can largely contribute to a country’s economy
What is GNP (gross national product)?
- measure of total value of good + services produced by a country’s residence + businesses
What is GNI PPP (gross national income at purchasing power parity)?
- measure of total income earned by a country, which is adjusted to account for cost of living in diff countries, by converting a country’s GNI to international dollars
What are the strengths of using GNI PPP as a measure of economic inequality?
- provides a more accurate comparison of wealth + standards of living between countries bc adjusts for differences in price lvls
- more stable measurement bc it adjusts for inflation, so is less affected by fluctuating currency changes
What are the limitations of using GNI PPP as a measure of economic inequality?
- doesn’t account for income distribution within a country + so masks extremes
- doesn’t account for informal sector within a country (e.g. local goods + services) which can largely contribute to a country’s economy
- doesn’t show how gov. invests money (e.g. Cuban gov. have prioritised high standards of health + education so have a higher HDI compared to countries w same GNI)
- doesn’t consider other aspects of QOL such as education + healthcare
What is the Gini Coefficient?
- representation of lvl of income inequality within a country, by providing a single NO° between 0 + 1, where 0 = perfect equality + 1 = perfect inequality
- e.g. Norway, a HIC, has a Gini coefficient of 0.258, whereas Guatemala, a LIC, has a Gini coefficient of 0.599
What are the strengths of the Gini Coefficient in measuring economic inequality?
- allows simple + direct comparisons of eco. inequality within + between countries
- sensitive to changes in income distribution
- looks at entire distribution of income/wealth + so takes extremes into account
What are the limitations of the Gini Coefficient in measuring economic inequality?
- doesn’t account for informal sector within a country (e.g. local goods + services) which can largely contribute to a country’s economy
- doesn’t consider other aspects of QOL such as education + healthcare
What is the HDI (human development index)?
- introduced by UN in 1990, to measure + compare how dev. countries are based on education, life expectancy + GNI PPP
What are the strengths of the HDI in measuring economic + social inequality?
- (composite)
- combines social + eco. data so is more reflective of social + eco. inequality in a country bc more info is involved
- it’s produced annually by UN as part of HDR so it can be used to track changes in countries over time
What are the limitations of the HDI in measuring economic + social inequality?
- doesn’t consider distribution of wealth + QOL within + between countries, + are hidden bc statistics are based on avg.s
- e.g. many LICs have differences between R + U areas + between men + women, such as Peru which has a lower LE in remote areas than its avg. of 73yrs
- also in U areas, 95% of males are literate compared to women, which is 84%, + in R areas 88% of men are literate compared to women, which is only 63%
- doesn’t consider quality of education or standards achieved in each country
What e.g.s help measure social inequality?
- MPI (multidimensional poverty index)
- GII (gender inequality index)
What is the MPI (multidimensional poverty index)?
- measure of poverty, which takes into account 10 various factors affecting a persons QOL, which the UN created to complement HDI
What are the strengths of the MPI in measuring social inequality?
- takes into account many factors of poverty, inc education, health + QOL, broadening view of poverty + thus social inequality in a country
- MPI is used internationally, allowing comparisons of social inequalities between countries w diff income lvls + dev. statuses
- MPI measures education + health so social policies can be aimed at dec. inequality
What are the limitations of the MPI in measuring social inequality?
