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Measurements of Development

Measurements of Development. To identify ways to measure development To explain the limitations of measurements To evaluate the Human Development Index. Measurements of Development. GDP per capita (per person) Human Development Index (HDI) Index of Sustainable Economic Welfare (ISEW).

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Measurements of Development

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  1. Measurements of Development To identify ways to measure development To explain the limitations of measurements To evaluate the Human Development Index

  2. Measurements of Development GDP per capita (per person) Human Development Index (HDI) Index of Sustainable Economic Welfare (ISEW)

  3. Measurements of Development Limitation of GDP per capita: Distribution of income is ignored Black market is ignored Not adjusted for inflation Exchange rate conversion distorts figure Accounting procedures

  4. Measurements of Development Human Development Index (HDI) An index that measures 3 aspects of human development: Longevity (life expectancy) Knowledge (adult literacy rate) Standard of living (GDP per capita)

  5. Measurements of Development Analysis of HDI: Better at capturing development than GDP per capita Is incomplete (e.g. political participation & gender equality is ignored)

  6. Index of Sustainable Economic Welfare (ISEW) It places more emphasis on environmental Sustainability of economic activity. It is an attempt to measure the part of economic activity that increases the quality of life.

  7. Index of Sustainable Economic Welfare (ISEW) • Subtracts air pollution • Adds on unpaid household labour – cleaning & child minding • Income inequality • Environmental damage • Depletion of environmental assets

  8. Index of Sustainable Economic Welfare (ISEW) ISEW is a controversial indicator. It uses subjective measures. Reducing environmental damage may be misinterpreted as an objective economic indicator.

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