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Measuring of Development & Measuring of Inequality Nta UGC

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Measuring of Development & Measuring of Inequality Nta UGC Nta UGC-NET dec-2018 Online batch ,Lecture-29 Growth and Development, topic 1 Measuring of development & Measuring of inequality UGC-NET PAPER-2 (ECO) Measuring of development 1.Measuring development 1.PQLI 3.Multy-dimensional HDI (1979) Poverty index(MPI) Replaced 2010 HPI 1997 2.HDI 4.Gender (1990) inequality Index. 1. Physical Quality Of Life Index (PQLI): In 1979, D. Morris constructed a composite Physical Quality of Life Index (PQLI). He therefore, combines three component indicators of Infant Mortality, Life Expectancy and Basic Literacy to measure performance in meeting the basic needs of the people. life expectancy is measured in terms of years, infant mortality rate in terms of per thousand and basic literacy rate in terms of percentage. the choice of indicators are: 1. Life 2. Infant 3. Literacy Expectancy Mortality Indicator (LI) Indicator Indicator (LEI) (IMI) For life exp. For IMI- For literacy rate. Upper limit – 77 years. Upper limit- 09 Upper limit – 100 Lower limit- 28 years. Lower - 229 Lower limit- 0 Short forms- L.I.L PQLI index is measured as- LEI+IMI+LI PQLI= 3 PQLI is published by UNDP. 2. Human Development Index (HDI): Considering quality of Life Index, the United Nations was the first to prepare and publish Human Development Index in the year 1990. HDI originally developed by Mahbub ul Huq He formed a group of developed economist including Paul Streeten , Frances Stewart, Gustav Ranis, Griffen, Sudhir Anand, Meghnad Desai, and Amartya Sen. A.K.Sen use his work in this own work on Human capabilities. HDI is based on Non-economics social indicators like education, literacy school , health, and services. HDI undertaken by UNDP. HDI rank all the countries vary within the 0 to 1 range. 0.80- 1= very high ranking 0.50-0.799= high ranking. 0.338- 0.499= medium ranking. 0- 0.337= low ranking. the choice of indicators are: 1. Life 3.Per capita Expectancy at 2.Literacy rate. income. birth(longivity) (i) Living a long life or (ii) Being knowledgeable (iii) Standard of living on Longevity (LEI) on Educational Real per capita GDP (SLI). Attainment (Index EAI). Life expectancy – from Value vary form- 0 PCI vary from 100$ t0 0 to 85 years. to 100 75000$ HDI = (1/3) (LEI + EAI + SLI) (i) Longevity (LEF): Longevity means life expectancy at birth. It refers to the number of years a newly born baby is expected to live. Life expectancy in India at present is 66 years. (ii) Educational Attainment (EAI): It means education attained by the people of the country on an average basis. (а) Adult literacy rate (ALR) (b) Gross enrolment ratio (GER) (a) Adult Literacy Rate (ALR): The rate or the percentage of people aged 15 and above who can understand, read and write a short and simple statement in their everyday life are known as literate. (b) Gross Enrolment Ratio (GER): Gross Enrolment Ratio refers to the number of students enrolled at different levels of education. It is the percentage of population of different age groups engaged in educational pursuit. (iii) Real GDP Per Capita or Standard of Living (SLI): It is considered as a measure of the standard of living of the people of a country. In order to calculate human development index we are required to study and analyse longevity, educational attainment and real GDP per capita. HDI and India India rank 131 in 2017. 130 in 2016, among 188 nations . India HDI value is 0.640 Sri Lanka- 76. Maldives- 105 Pak- 150 Nepal-149 Norway- 1st Australia- 2nd Quality Of Life Index (QLI): Quality of life of the people is another index to measure the standard of living of the people in an economy. It is influenced by national and per capita income of the people. Many other factors like consumption, output, health, environment, education, freedom, security, non-violence peaceful atmosphere etc. also influence human welfare directly or indirectly. In other words, none of these factors alone determines the welfare of the people. At the same time, we should note that National Income is not itself the single representative factor of welfare. 3.Global Multidimensional Poverty Index (MPI) The Global Multidimensional Poverty Index (MPI) was developed in 2010 by the Oxford Poverty & Human Development Initiative (OPHI) and the United Nations Development Programme. and uses different factors to determine poverty beyond income-based lists. It replaced the previous Human Poverty Index. The global MPI is released annually by OPHI and the results published on its website. The global Multidimensional Poverty Index (MPI) is an international measure of acute poverty covering over 100 developing countries. Global Multidimensional Poverty Index (MPI) indicators. Dimension Indicators •Child Mortality Health •Nutrition •Years of schooling Education •School attendance •Cooking fuel •Toilet •Water Living Standards •Electricity •Floor •Assets The MPI is calculated as follows: MPI= H * A H: Percentage of people who are MPI poor (incidence of poverty) A: Average intensity of MPI poverty across the poor (%) India has been ranked 37th out of 103 nations in the 2017 global Multi-dimensional Poverty Index (MPI), according to a new report by the Oxford Poverty & Human Development Initiative. The OPHI is an economic research centre at the Oxford University, led by Professor Sabina Alkire. 4.Human Poverty Index The Human Poverty Index (HPI) was an indication of the standard of living in a country, developed by the United Nations (UN) to complement the Human Development Index (HDI) and was first reported as part of the Human Development Report in 1997. It was considered to better reflect the extent of deprivation in developed countries compared to the HDI. In 2010 it was Replaced by the UN's Multidimensional Poverty Index. The HPI concentrates on the deprivation in the three essential elements of human life already reflected in the HDI: longevity, knowledge and a decent standard of living. The HPI is derived separately for developing countries and a group of select high-income countries to better reflect socio-economic differences and also the widely different measures of deprivation in the two groups 5.Gender Inequality Index (GII) The Gender Inequality Index (GII) is an index for measurement of gender disparity that was introduced in the 2010 Human Development Report 20th anniversary edition by the United Nations Development Programme (UNDP). According to the UNDP, this index is a composite measure to quantify the loss of achievement within a country due to gender inequality It uses three dimensions to measure opportunity cost: reproductive health, empowerment, and labor market participation. The new index was introduced as an experimental measure to remedy the shortcomings of the previous indicators, the Gender Development Index(GDI) and the Gender Empowerment Measure (GEM), both of which were introduced in the 1995 Human Development Report India ranks low at 108th position out of 144 countries in Global Gender Gap Index 2017 released by WEF Global Gender Gap Measuring of inequality 1.The Lorenz Curve: An American statistician Conard Lorenz (1905) used a diagram to show the relationship between the population groups and their respective shares. The same diagram (Lorenz Curve) is used to show the relative inequality in the distribution of income at the world level. The Lorenz Curve is obtained by plotting the cumulative percentage of the nation’s income against the cumulative percentage of the nation’s households or population receiving this income. Generally, income is represented on the vertical axis of the diagram and households or population on the horizontal axis . a straight upward sloping line of absolute equality. The curve on extreme right side of the figure the right angled line represents the limiting case of absolute inequality. The Lorenz Curve is given by the indicated intermediate curve with the shaded area indicating the deviation from absolute equality and hence giving us a measure of the degree of inequality of income distribution. in actual practice no nation shows a completely equal distribution of income. The lowest 20% of the population (or families) generally receive substantially less than 20% of income, whereas the highest 20% of the population (or families) receive more than 20% of incomes. In that case there will be a curvature in the Lorenz curve as shown in the deviation zone. The more unequal the distribution of income, the more curvature there will be in the Lorenz curve. Indeed, if all of the income of a country were received by just one family, the curve would be a vertical line at a right angle to the horizontal axis like the extreme right hand side of the figure. If there is a trend towards a more equal distribution of income, the Lorenz curve will flatten out and move closer to the straight, bisecting line. Lorenz curve is always right side of the equality line. 2. The Gini Ratio: The Gini index or Gini coefficient is a statistical measure of distribution developed by the Italian statistician Corrado Gini in 1912. It is abtain by ratio of area bw diagonal line and Lorenz curve to the total area. It is often used to measure economic inequality, measuring income distribution or, less commonly, wealth distribution among a population. The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality. Values over 1 are theoretically possible due to negative income or wealth. A country in which every resident has the same income would have an income Gini coefficient of 0. A country in which one resident earned all the income, while everyone else earned nothing, would have an income Gini coefficient of 1. Graphical Representation of the Gini Index The Gini index is often represented graphically through the Lorenz curve, which shows income (or wealth) distribution by plotting the population percentile by income on the horizontal axis and cumulative income on the vertical axis.
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