GEOG 1HB3 Lecture Notes - Lecture 4: Purchasing Power Parity, Informal Sector, Gender Inequality Index
12 May 2018
School
Department
Course
Professor
May 9, 2018- Lecture 4A
Development and Inequality: Measuring Economic and Social Development
Recall:
- Development: a process of improvement in the material conditions of life
- Patterns between less developed and more developed (have and have nots)
- Three prominent theories emerged:
o F
- The world is marked by striking spatial variations in terms of well being
- These variations exist at numerous spatial scales
o E.g. global, regional, national, local
Measuring Development:
- Development: wealth or prosperity, i.e. average income
- Per capita (per person) income
- Measure mainly through proxy measures: GDP per capita or GNI per capita
- GNI or GDP: measures of the total value of all materials, foodstuffs, goods, services
produced by a country for a particular year
o GNI/ population = per capita GNI – a measure of income
- World Bank- GNI per capita, per country, ranked into four groups:
o Low income
o Lower-middle income
o Upper-middle income
o Upper income
Global Income Inequality: PPP
- GNI per capita is problematic
o The formal economy and not the informal economy
▪ Up to 80% of all economic activity is some countries
▪ Formal economies: ex. Government site
▪ Informal economies: out of government site
o Variations within a country (internal inequality)
▪ The income for provinces varies, for example
o Differences in cost of living
- An alternative: Purchasing Power Parity (PPP)
o Measues ho uh of a oo aket asket of goods ad seies eah
currency can purchase locally
o Example:
Country
Avg.
Income
Diff.
Cost of
Milk
Diff.
Cost of
Living
Diff.
Ecuador
$4, 510
$1.02
4, 421 L
Canada
$41,950
10x
$2.25
2x
18, 644 L
4x
o The difference is average income becomes less significant (not insignificant, just
less)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Development and inequality: measuring economic and social development. Development: a process of improvement in the material conditions of life. Patterns between less developed and more developed (have and have nots) The world is marked by striking spatial variations in terms of well being. These variations exist at numerous spatial scales: e. g. global, regional, national, local. Development: wealth or prosperity, i. e. average income. Measure mainly through proxy measures: gdp per capita or gni per capita. Gni or gdp: measures of the total value of all materials, foodstuffs, goods, services produced by a country for a particular year: gni/ population = per capita gni a measure of income. World bank- gni per capita, per country, ranked into four groups: low income, lower-middle income, upper-middle income, upper income. Gni per capita is problematic: the formal economy and not the informal economy, up to 80% of all economic activity is some countries, formal economies: ex.
