Download Measuring Social and Economic Development

Measuring Social and
Economic Development
A Look at the Human Development Index (HDI)
The Human Development Index (HDI)
…is the best known composite index
of social and economic wellbeing…
How the UNDP Measures
Human Development
• The HDI consists of three equally
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weighted components:
(1) “A long and healthy life” (Health)
(2) “Knowledge” (Education)
(3) “A decent standard of living” (Wealth)
Deconstructing Each Measure
• Each component of the HDI is measured
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in the following way:
Health
Measured by life expectancy at birth.
Education
Measured as a combination of adult
literacy (with two-thirds weight) and gross
enrollment (with one-third weight).
Wealth
Measured by GDP per capita.
Calculating HDI:
The United States
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Click here to access an
calculator.
In the United interactive
States, in HDI
2005:
The average life expectancy was 77.9.
The adult literacy rate was 99%.
The gross enrollment rate was 93.3%.
The GDP per capita was $41,890.
The HDI was .951.
The HDI ranking was 12th.
U.S. HDI = .951
What does it mean that the U.S. ranks
12th in the world with an HDI of .951?
The IMF’s GDP Per Capita
Rankings (2006)
Purchasing Power Parity (PPP)
1
Luxembourg ($80,471) 11 United Kingdom ($35,051)
2
Ireland ($44,087)
12 Finland ($34,819)
3
Norway ($43,574)
13 Belgium ($34,478)
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5
United States ($43,444) 14 Sweden ($34,409)
As you
15 Qatar ($33,049)
Iceland ($40,277)
6
Switzerland ($37,369)
16
7
Denmark ($36,549)
17
8
Austria ($36,031)
18
9
Canada ($35,494)
19
10
Netherlands ($35,078)
20
can see here,
the
United States has the
Australia
($32,938)
fourth
highest GDP per capita
Singapore
($32,867)
in the world. The question is:
Japan ($32,647)
how well is the United States
Germany ($31,095)
using its income to bring
Italy ($30,732)
about human development?
HDI 2014 Very High countries
HDI 2014 Low Countries
GDP 2104 Top
The UNDP’s HDI Rankings (2005)
1 Iceland (.968)
11 Finland (.951)
2 Norway (.968)
12 United States (.951)
3 Australia (961)
13 Spain (.949)
4 Canada
(.960)here to
14 access
Denmark an
(.949)
Click
interactive
5
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8
graph
Ireland
(.959)shows
15how
Austria
(.948)
which
some
countries do better
Sweden
16turning
United Kingdom
(.946)
than(.956)
others in
income
into education
Switzerland
(.955) opportunities
17 Belgium (.946)and therefore into
and health
Japan (.953)
18 Luxembourg
(.944)
higher levels
of human
development.
9 Netherlands (.953) 19 New Zealand (.943)
10 France (.952)
20 Italy (.941)
Is the HDI Enough to Measure a
Country’s Level of Development?
• According to the UNDP, the answer is:
• “Not at all.”
• “The concept of human development is much
broader than what can be captured in the HDI, or
any other composite indices…”
• “The HDI and the other composite indices can only
offer a broad proxy on some of the key the issues of
human development…”
• “A fuller picture of a country's level of human
development requires analysis of other human
development indicators and information.”
A Sampling of Other
Development Indexes
The Economist’s “Quality of Life” Index
UNICEF’s “Child-Welfare” Index
The “Happy Planet” Index
The UNDP’s “Human Poverty Index”
The UNDP’s “Gender Empowerment
Measure”
• International Living’s “Quality of Life” Index
• The “Global Peace Index”
• Freedom House’s “Freedom Rankings”
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Three Issues to Consider
When Evaluating
Indexes Like the HDI
1) Validity
2) Reliability
3) Parsimony
Validity
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What is the index supposed to measure?
What indicators make up the index?
Are these the best indicators for this index?
How are the indicators calculated?
Are there better ways to calculate these
indicators?
• In short, how well does the index actually
measure what it is supposed to be
measuring?
Reliability
• Who or what organization collected the
data?
• How were the data collected?
• In short, if you or someone else were to try
to replicate the index would you end up
with more or less the same results?
Parsimony
• The whole point of an index is to simplify
the measurement of a particular
phenomenon.
• In short, does the index rely upon as few
indicators as reasonably possible without
undermining its validity?