Measures of development Flashcards
HDI components with details
- Education: mean number and expected years of schooling
- Life expectancy: range of 25-85 years
- Standard of living: GNI at PPP to account for remittances and foreign aid and to reflex average income per person. It measures economic and social welfare of countries over time.
Explain GNI and how it is measured
Standard of living is measured by GNI at PPP
GNI comprises the total value produced within a country (i.e. its GDP) together with its income received from other countries. Income index = (ln(GNIpercapita) – ln(100))/(ln(75000)-ln(100))
How is HDI measured
HDI = cube root of (life expectancy index * education index * income index); geometric gives less emphasis to a extreme value
Oil rich countries generally show _____ income equality
Ex-communist countries generally show ____ income equality
low
high
Human poverty index measures
expectancy, education, and the ability of citizens to meet basic needs
Two types of Human poverty index
- HPI-1: Measures poverty in developing countries; the longevity part of the index measures the probability of living to the age of 40. The education component considers the adult literacy rate. The ability of citizens to meet basic needs is measured by the percentage of underweight children and the percentage of people not using improved water sources
- HPI-2: Measures poverty in developed countries; the probability of not surviving to at least the age of 60 is used. The percentage of adults which do not have literacy skills is calculated, and poverty is calculated by those living below the poverty line i.e. below 50% of median income
Average world HDI application
Average world HDI rose from 0.48 to 0.68 from 1970-2010 due to growth of East/South Asia, the Pacific (1=high level of economic development, 0=low level of development
IHDI
The Inequality-adjusted HDI (IHDI) – HDI adjusted for inequalities in the distribution of achievements in each of three HDI components
HDI measurement advantage
Measures are easy and cheap to collect
Measures are reliable
Comparisons between countries to be made to see which are more developed and it provides a much broader comparison between countries than GDP does.
Education and health are important development factors to consider and it can provide information about the country’s infrastructure and opportunities
HDI measurement disadvantage
Does not include factors that may affect future living standards
In developing countries, the data may not be completely reliable
HDI doesn’t consider human rights, gender equality, political freedom, the environment (i.e. human development), income distribution (high HDI but still have poverty e.g. India)
HDI usefulness advantage
HDI indicates whether GDP has been used to increase the standard of living
Takes into account the fact that there are other factors other than income that may improve human development
HDI usefulness disadvantage
The HDI does not take into account qualitative factors
PPP values change very quickly so are likely to be inaccurate
The HDI simplifies and captures only part of what human development entails. It does not reflex on inequalities, poverty, human security, empowerment etc.
GHDI
Gender-related Index (GHDI): measures the relative inequality between men and women. It combines HDI with a consideration of gender e.g. considers differences in life expectancies, income and education between genders. It stimulates proactive thinking and public policy to overcome systematic disadvantage of women, highlights areas in need of critical policy intervention
HDI component:
Standard of living:
Living standards - GNIpc is used as an indicator of the living standards of an economy, the rationale being that all citizens would benefit from their country’s increased economic production. Major advantages to using GNIpc within the HDI are that it is measured frequently, widely and consistently. The UN compares GNI/capita according to their PPP in us dollars. This takes into consideration the different cost of living in different countries.
HDI component:
Life expectancy
pro and con
Life expectancy – Average number of years a human has before death assuming constant health and living conditions. Life expectancy has improved over time due to improvements in technology, medicine, nutrition and sanitation.
Pro: Helps to show income equality as countries with high incomes with a lower HDI have higher income distribution
Con: HDI can vary within a country from place to place
HDI component:
Education
Education – measured by mean years of schooling index for adults over 25: MYSI = MY/15 (15 is the projected maximum of this indicator for 2025); Expected years of schooling index for children of school entering age EYSI = EYS/18 as 18 is the age of achieving a master’s degree. Education index = (MYSI + EYSI)/2. Higher education gives someone more chances in live and therefore improves their standard of living. It is a lead variable because it can provide predictions about future education therefore future development
Two other types of measures
- Access to clean water: subjective term ‘access’, basic necessity: key indicator of living standards
- Access to mobile phones per 1000 the population: not a clear indicator of health + living standards; allows a person to communicate, trade, pay money
MPI
The Multi-dimensional Poverty index (MPI) - Shows number of people who are multi-dimensionally poor (suffering deprivations in a third of weighted indicators) and the number of deprivations with which poor households typically contend
MPI Indicators
Indicators: Education (1/6 Years of Schooling, Child school attendance), Health (1/6 child mortality, nutrition), Standard of living (1/18 electricity, sanitation, drinking water, floor, cooking fuel, assets ownership)
MPI pro and con
Pro of MPI: Governments can specifically target the factors that are responsible for creating the poverty in specific groups; uses greater range of indicators so more accurate
Con of MPI: measures are very subjective
