Measures of Economic Development

Question 1

What are the 3 dimensions and 4 indicators in HDI

(Dimension-Indicator)

Answer 1

Health-Life expectancy at birth

Knowledge-mean years of schooling/expected years of schooling

Living Standards-Gross National Income (GNI) per capita

Question 2

Benefits of using HDI

Answer 2

-More dimensions and indicators than Real GDP
-could be used to question national policy choices
-Allows for comparisons between different regions and countries

Question 3

Drawbacks of using HDI

Answer 3

-Unreliable due to imperfect information
-Doesn’t account for quality of life/education
-Wide divergence between different regions in the same country
-HDI may not respond to short-term changes
-Doesn’t account for wealth inequality, pollution, distribution of wealth etc
-Lacks year-to-year comparability as countries may not release data

Question 4

What is IHDI

Answer 4

Inequality-adjusted Human Development Index:
-This is an adjustment of HDI which includes a fourth indicator of development:
inequality.

Question 5

Wat is MDI

Answer 5

Multi-Dimensional Poverty Index:
This measures the percentage of the population that is multidimensional poor.
It uses data for health, education and standard of living but uses a broader range of indicators within these categories.