7A Economic and Social Measures
Economic measures (both single and composite indices) of development (income per capita, economic sector balance) contrast with those focused on social development (Human Development Index (HDI), Gender Inequality Index (GII)) and environmental quality (air pollution indices)
Development: the improvement of quality of life (level of happiness, wellbeing or contentment, resulting from a way of living) of a country's population. Quality of life includes social, economic, cultural, political, demographic and environmental aspects.
Globalisation has led to increased development in some countries, but has also widened the gap between rich and poor in some cases.
The development gap can be:
Levels of development can be measured using single and composite indicators. They all vary in validity (how relevant), reliability (how accurate), and comprehensiveness (do they capture entirety?).
Single indicators (e.g. life expectancy, GDP per capita) measure one variable. They're easy to use and understand, but may not give an accurate representation of development (aren't very comprehensive)
Composite indices combine more than one variable into a single measure. (HDI, GII)
Economic Indicators
However, price level/cost of living varies significantly between countries; same money income will buy different quantities of goods and services, generating a different QoL.
Social Development
Examples are:
Development can also be measured using environmental indicators such as WHO air pollution levels. However these tend to be local, i.e. for specific cities, so can't be used to compare countries.
Air pollution is the introduction of harmful substances into the atmosphere, e.g. SO2, NOx, particulates and volatile organic compounds. Linked to respiratory diseases (lung cancer, asthma) and heart attacks.
However, Yale University's Environmental Performance Index measures countries' overall environmental quality on a scale from 0 to 100, using both indoor air quality, particulate and nitrogen dioxide concentration.
Emerging countries with large secondary economic sectors score poorly.
Globalisation has led to increased development in some countries, but has also widened the gap between rich and poor in some cases.
The development gap can be:
- between countries, e.g. in 2015 people in Luxembourg had incomes of $105,000 per year compared with only $220 in South Sudan
- within countries, e.g. in China's coastal cities incomes per capita are over $10,000 whereas in the rural west they are under $2000.
Levels of development can be measured using single and composite indicators. They all vary in validity (how relevant), reliability (how accurate), and comprehensiveness (do they capture entirety?).
Single indicators (e.g. life expectancy, GDP per capita) measure one variable. They're easy to use and understand, but may not give an accurate representation of development (aren't very comprehensive)
Composite indices combine more than one variable into a single measure. (HDI, GII)
Economic Indicators
- These qualify well-being in terms of real income
- Income per capita
- the mean income of a group of people
- misleading where there is high income inequality, since very high incomes pull up
- may be the best single indicator of development since higher income is often needed to raise aspects of QoL, e.g. health, education
- Gross National Product (GNP)
- measures output produced by country's factors of production wherever located
- Gross National Income (GNI)
- GNP discounted for depreciation - lost value through machinery wear and tear
- includes TNC profits and remittances sent home
- Gross Domestic Product (GDP)
- measures the total output of goods and services produced in a country over a year
- GDP per capita calculated by dividing GDP by total population of country
- Usually expressed in US $/year
However, price level/cost of living varies significantly between countries; same money income will buy different quantities of goods and services, generating a different QoL.
- Purchasing Power Parity (PPP) GDP per capita has become a popular may of comparing economic development between countries because unlike nominal GDP it takes into account the cost of living within countries.
Social Development
Examples are:
- The Human Development Index (HDI) is the combination of life expectancy at birth, income and years in education. (before 2010 used literacy and school enrolment)
- combines economic development (GNI per capita (PPP)) ad social development
- expressed on a scale between 0 (lowest) and 1 (highest)
- a few rich people cannot distort the average life expectancy and mean years of schooling from typical value
- countries have different rank positions for HDI and income per capita depending on political decisions (e.g. those that focus on output and military spending)
- The Gender Inequality Index (GII) combines the reproductive health of women, their participation in the workforce and empowerment to measure gender-based development.
- reproductive health combines maternal mortality ratio and adolescent fertility rate - indicator of women's status in society
- empowerment is measured by political representation in parliament and women's access to higher education (secondary and above)
- participation measures percentage of women of working age in labour force
- measured on a scale from 0 (no inequality) to 1 (most unequal) (so kinda opposite to HDI)
- compiled by the United Nations Development Programme since 2010
- modern western culture values increased inequality as an improvement, but the validity of this is debated (harmony with natural and religious systems, social harmony, roles of men and women?)
Development can also be measured using environmental indicators such as WHO air pollution levels. However these tend to be local, i.e. for specific cities, so can't be used to compare countries.
Air pollution is the introduction of harmful substances into the atmosphere, e.g. SO2, NOx, particulates and volatile organic compounds. Linked to respiratory diseases (lung cancer, asthma) and heart attacks.
However, Yale University's Environmental Performance Index measures countries' overall environmental quality on a scale from 0 to 100, using both indoor air quality, particulate and nitrogen dioxide concentration.
Emerging countries with large secondary economic sectors score poorly.
Other
- An index is a measure expressing a value as a percentage or a decimal fraction of the base value.
- Reliability
- All development indicators face problems with this
- All data is out of date as soon as it is collected
- Developing and emerging countries may lack the resources to collect accurate data
- Comprehensiveness
- Single indicators are less comprehensive measures of QoL than composite, since they only capture one aspect of QoL compared to several.
- Validity
- There is a broad agreement that economic indicators are relevant to QoL, however there is less of a consensus on whether some social, cultural and political measures constitute improvements to QoL, and/or their relative importance to it.
- Development indicators are often measured at a national scale, and conceal variation at a regional or local scale within a country. Varies space to space and between different groups of people.
- Then some weird stuff about economic sector balance and the Clark-Fisher model.
