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Human Development Index

Human Development Index

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Human Development Index

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  1. Human Development Index

  2. Three factors of Development • Economic • Social • Demographic

  3. HDI • HDI: Human Development Index, created by the United Nations, is a reflection of those three factors • The UN selects one economic factor, two social factors, and one demographic factor to compute the HDI • The highest HDI possible is 1.0, or 100% • Norway: 0.955, Australia: 0.938, US: 0.937, Netherlands: 0.921, Germany: 0.92

  4. Economic Factors • The United Nations using gross domestic product per capita as the economic factor for calculating HDI • Other economic factors are considered: • Types of jobs • Productivity • Raw Materials • Consumer Goods

  5. GDP Per Capita • Individuals in MDC (More Developed Countries) typically earn more income than in (Lesser Developed Countries) • Per capita income is difficult to calculate in LDCs • GDP is the value of the total output of goods and services produced within a country, normally during a year • Geographers use GDP per capita instead • GDP divided by total population

  6. Types of Jobs • Jobs typically fall into three categories: primary, secondary, and tertiary • In an LDC, sometimes 75% of workers are in a primary sector, compared to 5% in an MDC • In an MDC, jobs have decreased in primary and secondary sectors, and increased in tertiary

  7. Productivity • Workers in an MDC are more productive than workers in an LDC • Productivity: the value of a particular product compared to the labor used to make it • Machinery can help increase productivity

  8. Raw Materials • Development requires access to raw materials and energy sources • LDCs that have petroleum are able to advance more quickly than those that do not • Not all developed countries have raw materials (ex: Japan) • Developed through world trade and technology

  9. Consumer Goods • Wealth can be divided between necessities (clothing, shelter, and food) and luxuries (television, cars, technology) • The type of goods and services purchased by consumers is another indicator of economic development • How important is the car? Telephone? Television?

  10. Social Indicators • The United Nations uses literacy rate and Gross Enrollment Rate as the social factors for calculating HDI. • MDCs use their wealth to provide schools, hospitals, and welfare services • Social factors include: • Education and literacy • Health and welfare

  11. Education and Literacy • The higher the level of development, the greater are both the quantity and quality of education • The quality of education is measured in the student/teacher ratio and the literacy rate • Literacy Rate: the percentage of a country’s people that can read and write • Typically 95% in MDC, and less than 33% in LDC

  12. Health and Welfare • People are healthier in MDCs • Most developed states have socialized healthcare • United States is only major developed country where health care is privatized • MDCs also offer welfare assistance to help those unable to work • Denmark, Norway, and Sweden provide the most welfare assistance

  13. Demographic Indicators • The United Nations uses life expectancy as the demographic indicator for HDI. • Demographic indicators include: • Life Expectancy • Infant Mortality Rate • Natural Increase Rate • Crude Birth Rate

  14. Life Expectancy • Better health and welfare cause people in MDCs to live longer • Life expectancy: the average number of years a newborn can expect to live at current mortality levels • Babies are expected to live to their mid-40s in LDCs, and mid-70s in MDCs • MDCs have large number of elderly people, and LDCs have large number of children

  15. Infant Mortality Rate • Infant Mortality Rate: The annual number of deaths or infants under one year of age, compared to the number of live births • More babies survive infancy in an MDC • 90% of infants survive in an LDC • 99% of infants survive in an MDC

  16. Natural Increase Rate • NIR: the percentage by which a population grows in a year. • It is computed by subtracting the CBR-CDR • The NIR is about 2% in LDCs, and 1% in MDCs

  17. Crude Birth Rate • Crude Birth Rate: the total number of live births in a year for every 1,000 people alive in the society • LDCs have higher NIRs, because they have higher CBRs • The CBR in an LDC is 40 per 1,000 • The CBR in an MDC is 15 per 1,000

  18. Calculating the HDI Find a partner with a calculator You will be turning this in

  19. Kuwait: life expectancy at birth 77.1 years (LE) the adult literacy rate is 93.3% (LR) the education enrollment ratio is 73% (EE) and the gross domestic product per capita is $19,384. (GDP) Brazil: the life expectancy at birth is 70.8 years the adult literacy rate is 88.6% the education enrollment ratio is 86% and the gross domestic product per capita is $8,195 Write this info down

  20. Question 1. Before making any calculations, how do you think these two countries will compare if we use these measures to come up with a single HDI for each country?

  21. To calculate the HDI, first combine the two measures of education using a weighted average, with a two-thirds weight for the adult literacy rate (ALR) and a one-third weight for the education enrollment ratio (EER). The formula for the weighted average to give the education percentage (EP) as a measure of education is Educational Percentage

  22. Educational Percentage

  23. HDI calculations • To calculate a single numerical measure of human development, the HDI, we want to combine the measure of health, which is in years, with the measure of education we just found, which is given as a percentage, with the measure of economic well-being, which is given in U.S. dollars.

  24. Question 3. Explain why we cannot combine these values directly with different units (like years, percent, and dollars) into a single measure.

  25. To convert life expectancy values to a life expectancy index number, we first identify a reasonable minimum and maximum for each of these values. The United Nations uses 25 as the minimum and 85 as the maximum. Then the life expectancy value (LEV) is converted to a life expectancy index (LEI) using the equation Life Expectancy

  26. Question • 4. Explain why an index number defined this way will be between 0 and 1 and will not have any units (like years) associated with it.

  27. Life Expectancy Index

  28. The education percentage (the weighted average of the adult literacy rate and the education enrollment ratio you computed in question 1) is converted to an index value by using a minimum of 0 (percent) and a maximum of 100 (percent). This gives the education index (EI) in terms of the education percentage (EP) as Educational Index

  29. Educational Percentage

  30. For the final conversion to an index value, we convert the gross domestic product per capita in US$ (GDP) to an index value. This is done a bit differently than the previous conversions. Here base-ten logarithms are used so that the effect of a larger GDP value is diminished. (Natural logs may be used as well.) The minimum and maximum values used by the United Nations for the GDP are 100 and 40,000, respectively, and the equation to calculate the GDP index value (GDPI) Calculating the HDI

  31. GDP Index

  32. Final HDI Index

  33. Final Reflection