Measures of Development HDI Overview

Study Notes

Human Development Index (HDI)

HDI measures three key dimensions: education, health, and living standards.
Education is assessed through mean years of schooling and expected years of schooling.
Health is evaluated using life expectancy at birth as an indicator.
Living standards are measured through gross national income (GNI) per capita adjusted for purchasing power parity (PPP).
The dimensions are combined into a single index that ranges from 0 to 1, with higher values indicating a higher level of development.

Advantages and Limitations of HDI

HDI provides a composite view, integrating multiple factors to assess development rather than relying on a single economic indicator.
It highlights areas needing improvement, like education and health services, beyond mere economic growth metrics.
Limitations include its lack of attention to income distribution, which can mask inequalities within countries.
HDI does not account for environmental factors or the sustainability of development.

Definition of Economic Development

Economic development encompasses improving individuals' well-being and quality of life including living standards, poverty alleviation, better health and education, and increased freedom.
Distinction exists between economic development (broader focus on qualitative improvements) and economic growth (narrow focus on real GDP increase).

Key Indicators of Development

Access to clean water indicates public health and sanitation standards.
Access to the internet signifies infrastructure development and potential for business and education improvements.
Energy consumption per capita reflects living standards and individual capability for affordable amenities.
The proportion of the population employed in agriculture suggests human capital levels; lower agricultural employment often denotes higher specialization and potential for economic development.
The number of mobile phones per 100 people serves as an indicator of connectivity and technological access, correlating with improved living standards.

Economic Development vs. Economic Growth

Economic development implies enhanced living standards while economic growth denotes an increase in real GDP.
Growth can be driven by government spending, particularly investments in infrastructure, which can also foster development by increasing human capital.

Country Classifications

LEDC (Less Economically Developed Countries) indicate nations with lower standards of living and economic activity.
MEDC (More Economically Developed Countries) refer to nations with higher living standards, greater economic activity, and advanced infrastructure.

Graphical Representation of Economic Concepts

Economic development is often represented as an increase in Long-Run Aggregate Supply (LRAS), indicating enhanced productive capacity.
Economic growth is depicted through an increase in Aggregate Demand (AD), leading to a higher output level.
Government spending, especially on capital projects (like schools), fosters both economic growth and development by increasing LRAS for better living standards and long-term productivity.

Description

This quiz focuses on the three dimensions of the Human Development Index (HDI), including education, health, and living standards. It also examines how HDI is measured and the advantages and limitations of using it for comparing levels of development across countries.