measuring progress

Question 1

what is the definition of progress?

Answer 1

If, for any country, the living conditions, freedoms, opportunities, and quality of life are improving forthe vast majority of its citizens. it needs to be inclusive and sustainable

Question 2

what are the 4 types of wellbeing and give an example for each?

Answer 2

1. Material well-being - income and wealth
2. Physical well-being - health
3. Psychological well-being - happiness
4. Participatory well-being - education, political freedom, civil society

Question 3

what does the Armartya sen argue progress is about?

Answer 3

progress is about the development of human capabilities

Question 4

what does social welfare depend on/

Answer 4

Social welfare (W) depends on:
W = f (Y, I, P)
Positively on income per capita (Y), f′ > 0
Negatively on inequality (I), f′ < 0
Negatively on poverty (P), f′ < 0

Question 5

what is the definition of sustainable development?

Answer 5

Sustainable development is development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs

Question 6

what is jeffrey sachs 4 objectives of sustainable development?

Answer 6

1. Economic prosperity; (reduce poverty and inequality)
2. Social inclusion & cohesion; (reduce discrimination and increase social mobility)
3. Environmental sustainability; (reduce costs and increase benefits of growth)
4. Good governance; (increase trust, participation& accountability, reduce corruption)

Question 7

what are the different types of indicators for progress?

Answer 7

Economic
Social / Demographic
Composite (“Mashup”)
Political
Physiological / Anthropometric
Psychological

Question 8

what are the problems with the real GDP per capita measures?

Answer 8

Need to adjust for purchasing power differences - use PPP
Income distribution issues - inequality
Content of GDP - guns v consumer goods
Unrecorded activities - “informal economy”
Excludes “bads” - environmental deterioration
Neglects non-material well-being - “happiness”

Question 9

what is the formual for the gini coefficent?

Answer 9

the area between the line of equality and the lorenz curve/ the total area under the line of equality

Question 10

what is the lorenz curve.

Answer 10

it is a curve that shows the distribution of income in an economy. it is drawn on the plane percentage of income-percentage of population (y-x)

Question 11

what is a case that argues for the redistribution of income to the poor?

Answer 11

due to the diminishing marginal utility of money the more income you have the less utility you will gain from it. as a result the redistribution of money will increase the total utility of the economy.

Question 12

what is J stigletz theory in the price of inequality?

Answer 12

Social capital and trust hold societies together
“If certain groups control the political process, they will use it to design an economic system that favours them”
Trust in government has been eroded in the USA
Rising inequality a major contributor to this development
Result - reduction in political participation (voting) andrise of populists and extremists (also in Europe!)

Question 13

what are the 4 broad categories of the freedom index ?

Answer 13

Rule of Law (property rights, government integrity, judicial effectiveness)
Government Size (government spending, tax burden, fiscal health)
Regulatory Efficiency (business freedom, labor freedom, monetary freedom)
Open Markets (trade freedom, investment freedom, financial freedom)

Question 14

what is the trend in the comparison of GDP per capita?

Answer 14

the world has experienced a divergence in the gdp per capita between counties

Question 15

what is the trend in the comparison of life expectancy?

Answer 15

the world has experiences a convergence of life expectancies

Question 16

what is the preston curve?

Answer 16

the preston curve shows the trend between life expectancy and the gdp per capita. as income rises from the lower levels the life expectancy rises rapidly however after a certain income the life expectancy levels off

Question 17

what are the basic need and how do they effect the life expectancy?

Answer 17

Nutrition
Basic education
Clean water
Basic housing
Basic healthcare
they are all inputs to the output of life expectancy

Question 18

what are the different composite indicators?

Answer 18

the physical quality of life index
human development index

Question 19

what is the physical quality of life consist off>

Answer 19

Life Expectancy
,Infant Mortality
Literacy

Question 20

what does the human development index consist off?

Answer 20

income( income per capita)
life expectancy( life expectancy at birth)
educational attainment (mean years of schooling/expected years of schooling)

Question 21

what are the crucial inputs to the development of human capabilities?

Answer 21

education and health

Question 22

according to Sen, what is a good measure of progress>

Answer 22

life expectancy and mortaliity data are good measures of progress as they are measures of health which will affect the acquisition of human capabilities

Question 23

what are Fukuyama 3 elements of political order?

Answer 23

Emergence of a strong state
Democratic accountability
Rule of law (individual rights)

Question 24

what are the three factors that determine happiness?

Answer 24

Demographic and personal factors, such as health, age, family, education, gender;
Economic factors, such as income and employment/unemployment
Political factors, such as freedom, participation, and democratisation.

Question 25

what is the easterlin paradox?

Answer 25

Why at a point in time are happiness and income positively associated, but over the life cycle there is no relationship’?

Question 26

does income make people happier?

Answer 26

A higher income per capita may not increase happiness, but it certainly makes life more “comfortable”