INDEXES measuring development
COMPOSITE INDEX MEASUREMENTS
- Human Development Index
SINGLE INDEX MEASUREMENTS
- Infant Mortality
COMPOSITE INDICATORS OF DEVELOPMENT
Composite indicators use a combination of different indicators to get a more accurate picture.
GDP vs GNI (Single Index)
The gross domestic product (GDP) is one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period; you can think of it as the size of the economy.
The gross national income (GNI) is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP) plus factor incomes earned by foreign residents, minus income earned in the domestic economy by nonresidents
HUMAN DEVELOPMENT INDEX / HDI (Composite Index)
The Human Development Report is published every year since 1990. It looks at countries’ development beyond economic performance as measured by HDI. This single statistic summarizes a country’s achievements along three key dimensions of human development. The HDI is the geometric mean of normalized indices for each of the three dimensions:
- Long and healthy life assessed by life expectancy at birth, using a minimum value of 20 years and maximum value of 85 years.
- Being knowledgeable measured by mean of years of schooling for adults aged 25 years and expected years of schooling for children of school entering age. The indicators are normalized using a minimum value of zero and maximum aspirational values of 15 and 18 years, respectively. The two indices are combined into an education index using arithmetic mean.
- A decent standard of living measured by gross national income per capita. The goalpost for minimum income is $100 (PPP) and the maximum is $75,000 (PPP). The HDI uses the logarithm of income to reflect the diminishing importance of income with increasing GNI.
STRENGTHS & WEAKNESSES OF SINGLE AND COMPOSITE INDEXES
Strengths of the HDI
It is a composite indicator which measures life expectancy, education and per capita incomes.
- It allows for comparison between regions and countries.
- It has been in existence since 1990 and allows for analysis of change over time.
Weaknesses of the HDI
- It does not take into account environmental cost of development.
- It could be based on unreliable data.
- It is an average and does not show internal disparities.
- It does not measure human rights, levels of corruption, gender equality etc.
Weaknesses of GNI:
- GNI is not a composite indicator such as HDI, which allows more (non-economic) variables to be measured
- GNI does not indicate spatial or demographic disparities within countries
- GNI does not give any indication of human rights, health or gender equality
- GNI does not take into account purchasing power parity
- GNI excludes the informal economy (unofficial work paid in cash)
- List the different types of indicator
- Explain what a composite indicator is
- Compare & contrast GDP and GNI
- Describe and explain the HDI
- Summarise the strengths and weaknesses of single and composite indicators
EXPLORE GLOBAL DISPARITIES WITH HDI
Find data examples for HDI countries in the top, middle and bottom of global averages.
Read pp 83-84 Patterns & Change Textbook
Prepare a five minute presentation for your index including:
a full definition of the index
explanation of link with development
observable patterns and trends