EC207 Lecture Notes - Lecture 15: Human Development Index, Natural Capital, Ecological Footprint
Document Summary
Why non-traded services should be cheaper in poor countries: Lower wages therefore translate into lower costs of production. *gni per capita comparisons between developed and less-developed countries is exaggerated by use of foreign exchange rates. > does not measure relative domestic price of different currencies. Compare gni and gdp through purchasing power parity (ppp): Ppp is calculated using a common set of international prices for all goods and services produced,valuing goods in all countries at us prices (review slide 29) Education adult literacy (2/3) and primary, secondary and post-secondary enrolment (1/3) + 1/3 (education) dimension index: (actual value- min value/ max-min) Gross enrolment is overstated (dropouts included) -no attention to the role of quantity. Takes cube root of product of 3 -component plus indexes. Reused education components -max values have been increased. Ndhi= (h 1/3) (e 1/3) (i 1/3) (review slide 42 for example!!!) Wealth estimates: include produced capital natural capital + intangible capital.
