Measuring Social and Economic Development

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Measuring Social and Economic Development
A Look at the Human Development Index (HDI)
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Understanding Indexes

• What is an index?
• An index is a composite of indicators that
  produces a single calculation which can then be
  ranked.

Lets look at some examples!!
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The Body Mass Index
Click here to calculate your own body mass index.
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The Wind Chill Index
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The Big Mac Index
Click here to watch a short informational video
about the Big Mac Index
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Other Common Indexes
Click here to see the 2008 rankings
Click here to see the indicators that make up
the index
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Economic Social Indexes

• Economic and social indexes are like those we
  just talked about except they include economic
  and social data (such as income, educational
  attainment, health, etc.) rather than wind
  speeds, body weight, and the like.

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The Human Development Index (HDI)
is the best known composite index of social and
economic well-being
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The Concept of Human Development
"The basic purpose of development is to enlarge
people's choices. In principle, these choices can
be infinite and can change over time. People
often value achievements that do not show up at
all, or not immediately, in income or growth
figures greater access to knowledge, better
nutrition and health services, more secure
livelihoods, security against crime and physical
violence, satisfying leisure hours, political and
cultural freedoms and sense of participation in
community activities. The objective of
development is to create an enabling environment
for people to enjoy long, healthy and creative
lives."
Mahbub ul Haq -- Founder of the Human Development
Report
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How the UNDP Measures Human Development

• The HDI consists of three equally weighted
  components
• (1) A long and healthy life (Health)
• (2) Knowledge (Education)
• (3) A decent standard of living (Wealth)

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Deconstructing Each Measure

• Each component of the HDI is measured 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.

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Calculating HDIThe United States
Click here to access an interactive HDI
calculator.

• In the United States, in 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.

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U.S. HDI .951
What does it mean that the U.S. ranks 12th in
the world with an HDI of .951?
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The IMFs GDP Per Capita Rankings
(2006)Purchasing Power Parity (PPP)
As you can see here, the United States has the
fourth highest GDP per capita in the world.
The question is how well is the United States
using its income to bring about human
development?
United States (43,444)
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The UNDPs HDI Rankings (2005)
United States (.951)
Click here to access an interactive graph which
shows how some countries do better than others
in turning income into education and health
opportunities and therefore into higher levels
of human development.
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Is the HDI Enough to Measure a Countrys 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.

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A Sampling of Other Development Indexes

• The Economists Quality of Life Index
• UNICEFs Child-Welfare Index
• The Happy Planet Index
• The UNDPs Human Poverty Index
• The UNDPs Gender Empowerment Measure
• International Livings Quality of Life Index
• The Global Peace Index
• Freedom Houses Freedom Rankings

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Three Issues to Consider When Evaluating Indexes
Like the HDI

• Validity
• Reliability
• Parsimony

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Validity

• 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?

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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?

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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?

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Writing Exercise

• How would you define human development?
• Specifically, what indicators would you focus on
  if you were trying to measure human development?
• Would you measure human development differently
  than the Human Development Index (HDI)? Why or
  why not? Explain.

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Whats the Economy For, Anyway?A Project of the
Center for Communication and Civic Engagement
at the University of Washington.