Wiki Measures of Development


Basic Description

The Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions.

The HDI can be viewed as an index of 'potential' human development (or the maximum IHDI that could be achieved if there were no inequality).

Purchasing Power Parity

To compare economic statistics across countries, the data must first be converted into a common currency. Unlike conventional exchange rates, PPP rates of exchange allow this conversion to take account of price differences between countries. In this measure, one dollar has the same purchasing power over a local or domestic GDP that the US dollar has over US GDP. This rate allows a standard comparison of real price levels between countries otherwise normal exchange rates may over or undervalue purchasing power.

PPP estimates use price comparisons of comparable items. Take a fixed basket of goods. Suppose it costs $100 in the US and 1000 rupees in India ; this indicates that one dollar provides exactly the same purchasing power as 10 rupees. The purchasing power parity (PPP) exchange rate is defined as US$1=10. In the Big Mac Index, the "basket" in question is considered to be a single Big Mac burger as sold by the McDonald's fast food restaurant chain.

Example of PPP


GDP The gross domestic product (GDP) or gross domestic income (GDI) is a basic measure of a country's overall economic output. It is the market value of all final goods and services made within the borders of a country in a year. GDP per capita – per person

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 (Todaro & Smith, 2011: 44). (All figures in millions of US dollars).Comparing the GNI and GDP shows us whether a nation's resources are put to capital creation or declining toward abroad.

Demographic Indicators

Many statistics used for population demographics can also indicate development.

  • Life Expectancy: How long a child born now can expect to live.
  • Infant / Child Mortality Rate: Number of children that die before their first / fifth birthday These would be good indicators of the overall health of the people
  • Total Fertility Rate: Number of children the average woman has in her lifetime
  • Crude Birth Rate: Number of children born to an average 1000 people within a country.


Gender Inequality Index

The GII is an inequality index. It measures gender inequalities in three important aspects of human development—reproductive health, measured by maternal mortality ratio and adolescent birth rates; empowerment, measured by proportion of parliamentary seats occupied by females and proportion of adult females and males aged 25 years and older with at least some secondary education; and economic status, expressed as labour market participation and measured by labour force participation rate of female and male populations aged 15 years and older. The GII is built on the same framework as the IHDI — to better expose differences in the distribution of achievements between women and men. It measures the human development costs of gender inequality, thus the higher the GII value the more disparities between females and males and the more loss to human development.