Measuring economic development
Complexity of measuring economic development
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It is complex to measure the level of economic development, so it is not possible to use only one single indicator to reflect the level of economic development accurately.
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Therefore, Economist consider different individual attributes and characteristic to distinguish a country's level of economic development, and these attributes and characteristics are measured by the use of indicators.
Single indicators
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Value indicators (GDP/GNI) / I call it value since they present dead values
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Health indicators
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Education indicators
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Composite indicators
Value indicators
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GDP per capita - the total amount of goods and services that are produced in an economy within a certain period of time / population in the economy
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GNI per capita - the total amount of income earned by all population in an economy over a certain period of time / population in the economy
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GDP per capita PPP (purchasing power parity) - purchasing power parting means buying power equivalence, the amount of a country's currency that is needed to buy the same quantity of local goods and services that can be bought with US$1 in the United States. This can eliminate the influence of price changes on the value of output/income.
Comparing value indicators
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GNI is better indicate of the standard of living, and GDP us better indicators of the level of output per person produced in the economy.
Health Indicators
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Life expectancy at birth
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Maternal mortality rate
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Infant mortality rate
Education Indicators
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Adult literacy rate
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Primary school enrollment
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Secondary school enrollment
Composite Indicator
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The most commonly used indicator is the HDI - Human Development Index
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HDl measures average achievement in combining: long and healthy life / access to knowledge / access to decent standard of living
1. Long and healthy life (measured by life expectancy at birth)
2. Access to knowledge (measured by mean years of schooling and expected years of schooling)
3. Access to decent standard of living (measure by GNI per capita (US$PPP)
Other composite indicators
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Inequality-adjusted Human Development Index
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Gender Inequality Index
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Multidimensional Poverty Index