Economic Performance - HDI

What is HDI?

- The HDI (Human Development Index) is a measure of standard of living used since 1990. - It comprises three equally weighted elements: HEALTH (measure at life expectancy at birth), GDP PER HEAD PER CAPITA $ (the rate conversion of the local currency into US dollars is such that the same basket of goods and services could be bought in each country) and EDUCATION (years of schooling)

How is HDI better than normal economic development measures?

Economic development measure the quality of growth, rather than merely an increase in incomes. In order to measure the quality of growth we may take into account access to resources, living standards, the ability to make choices ad the sustainability of growth. - Indicators such as the HDI have developed by the UN to combine the advantages of GDP measures and non-GDP economic and social indicators.

What is the difference between economic growth and economic development?

Growth measures incomes, whilst development measures quality of life, distribution of incomes and access to resources.

If you uses a country's GDP per head ranking at PPP values and its HDI - Subtracting the second from the first, what does this mean?

If the figure is positive, the country excels in education and health relative to incomes, vice versa if the outcome is negative.

Assess the Human Development Index?

The HDI is helpful measure of development because it uses reliable and fairly easy-to-obtain indicators, takes income into account but qualifies income in terms of the cost of living. However the HDI gives no indication of the distribution of incomes and indication of deprivation might make it more useful: - Life expectancy is easy to measure but it doesn't give any indication of the quality of life - Education might be unreliable if it means that students are repeating years because they cannot make progress.