EC207 Lecture Notes - Lecture 5: Gross Enrolment Ratio, Human Development Index, Cube Root
EC207 – Lecture 5
Chapter 2 – Comparative Economic Development
HDI
Summary of human development.
• - Health measured by Life expectancy at birth
• - Education/knowledge measured by Adult literacy (2/3 weight) + Combined primary,
secondary and tertiary gross enrollment ratio (1/3 weight)
• - Income/Standard of living measured by Real GDP per capita (PPP US)
There are predetermined maximum and minimum values.
The dimension index:
(Actual value – min value)/(max value – min value)
HDI = 1/3 (income index) + 1/3 (life expectancy index) + 1/3 (education index) Example:
Bangladesh (2007 data)
1. Health index = ((65.7) – 25)/(85-25) = 0.678
2. Adult Literacy index (53.5 – 0)/(100-0) = 0.535
3. Combined education = 52.1-0/100-0 = 0.521
a. Education index = 2/3(0.535) + 1/3(0.521) = 0.530
Income index or GDP index = (log(1241) – log(100))/(log(40000)-log(100)) = 0.420 HDI =
1/3(0.420) + 1/3(0.678) + 1/3(0.530)
= 0.543
Country Classification:
Document Summary
Health measured by life expectancy at birth. Education/knowledge measured by adult literacy (2/3 weight) + combined primary, secondary and tertiary gross enrollment ratio (1/3 weight) Income/standard of living measured by real gdp per capita (ppp us) The dimension index: (actual value min value)/(max value min value) Hdi = 1/3 (income index) + 1/3 (life expectancy index) + 1/3 (education index) example: Bangladesh (2007 data: health index = ((65. 7) 25)/(85-25) = 0. 678, adult literacy index (53. 5 0)/(100-0) = 0. 535, combined education = 52. 1-0/100-0 = 0. 521, education index = 2/3(0. 535) + 1/3(0. 521) = 0. 530. Income index or gdp index = (log(1241) log(100))/(log(40000)-log(100)) = 0. 420 hdi = 0. 5 to 0. 799 medium human development country 0. 8 to 1. 0 high human development country. Now a geometric mean rather than an arithmetic. Takes the cube root of the product of the three component indexes. Education component uses average actual educational attainment of the whole population and the expected attainment of today"s children.
