Measuring disparities

Disparities in wealth and development

 Development

Development means improvement in the quality of life

It includes wealth, but it also includes other important aspects
of our lives
Development occurs when there are improvements to individual
factors making up the quality of life
For example, development occurs in a low-income country when:
local food supply improves due to investment in machinery and
fertilisers
the electricity grid extends outwards from the main urban areas to
rural areas
a new road or railway improves the accessibility of a remote province
levels of literacy improve throughout the country.
Factors comprising the quality of life
 Measuring criteria

Economic wealth
Gross Domestic Product(GDP) and GDP per capita
Nominal and PPP (purchasing power parity)
GNP(gross national product) and GNP per Capita
Gross National Income (GNI)

Social, cultural and wellfare

Human development index (HDI)
Infant Moratality rate (IMR)
Education Index (EI)
Human Poverty Index (HPI)
Human freedom index (HFI)

Sustainable development
Ecological footprint
 Economic wealth

Gross domestic product (GDP): The total value of all goods and services
produced domestically (inside a country) by a nation during a year.

Gross national product (GNP): The total market value of all goods and
services produced by a nation in a year. It also includes the value of goods and
services produced overseas.

Gross national income (GNI): The total value of good and services produced
within a country together with the balance of payments from or to other
countries.
GNI is increasingly become the preferred monetary indicator.

Balance of payments (BoP) is a record of all transactions made between one

particular country and all other countries during a specified period of time.
A negative balance of payments means that more money is flowing out of the country
than coming in, and vice versa.
 Countries by economic development

More economically developed country (MEDC): A developed

country, where the tertiary sector is probably the most important
sector of the economy.
Less economically developed country (LEDC): A poorer
country where the most important sector of the economy is
probably the primary sector.
Newly industrialised country (NIC): A developing country where
the most important sector of the economy is probably the
secondary sector.

Low income Countries ($1,025 or less)

Middle income countries
lower middle income, $1,026 - $4,035;
upper middle income, $4,036 - $12,475
High income countries ($12,476 or more) (by World Bank)
 Development
Development: An improvement in the quality of life.
Although wealth comes into this, many other things are also important
like health, education and security.

Indices: An arrangement of material or figures in a numerical

order

Definition of terms:
Developed and developing countries
North and south
First, second and third world
MDCs, LDCs and NICs
High income, middle income and Low income countries

How do we measure it ?
NICs 2011 (CIA)
 Problems with economical indicators

Most countries use different currencies, because the value of currencies change
against each other (exchange rates) it is hard to make accurate comparisons.

All countries have a formal and an informal economy.

The formal economy is regulated by the government and its value is known.
The informal economy (things like shoe shining, car windscreen cleaning) aren't so the value
is unknown

Some goods and services are unpaid e.g. volunteering in a charity shop or
parenting.

Looking at a country's overall GNI disguises intra-country variations.

For example the East of China is becoming very rich, but much of the west is still very poor.

Just looking at money also neglects many other important aspects of development
e.g. education and healthcare.

Difference between market and centrally planed economy

 Human development index

Human development index (HDI):HDI was developed in 1990

and is used by the United Nations to measure levels of
development.

HDI looks at three variables:

Longevity (Life expectancy at bith)
Education
Comparing expected years of schooling for current school children and mean
years of schooling for adults age 25 (the old system just looked at adult literacy)
Income (GNI per capita PPP)

The HDI calculations score all countries between 0 and 1.

HDI is what is known as acomposite measure. This simply

mean that more than one variable is taken into account
Top 20 Bottom 20
World map by HDI
 Infant mortality rate (IMR)
IMR is widely used as indicatior of development for number of reasons
High IMRs are found in least developed countries
Most causes of deaths in this countries are preventavle
With clean water, sanitation, healtcare housing and nutrition IMRs are low

Infant mortality rates can be high for a number of reasons including:

The health of the mother
Natal care
Diet
Disease
Conflict
Access to healthcare and medication

Measuring infant mortality accurately can be problematic because in

many LEDCs birth certificates and death certificates are not always
given and many births take place outside of hospitals

There are big differences in the rates of infant mortality around the world.
 Education

Education can be measured in countless ways including

adult literacy,
student teacher ratio,
school enrollment,
number of school years completed
number of university graduates

Access to education is a considered an important goal

because it helps individuals and countries to move out of
poverty, by getting a better job, reducing birth rates, etc.

When looking at education it is important to look at the

education received by boys and girls.
 Nutrition

Today there are 815 millions hungry people in

developing countries
Up to 10 million die every year from hunger and hunger-
related diseases
Nourishment is an important indicator because it can
affect peoples ability to work, get educated and fight
disease
Of the total number of undernourished people:
221 milion live in India
203.5 million in sub-Saharan Africa
142 milion in China
Nutrition
 To do:

Using course companion describe :

The educatuon index
Gender empowerment measure(GEM)
Human poverty index (HPI 1 and 2)