Measurement of Economic Development

(ANG ECONOMIC DEVELOPMENT PO AY ISANG PROSESO NG PAGBABAGO SA LOOB NG MAHABANG

PANAHON. ANG MGA PAGBABAGONG ITO NAMAN AY PARA SA IKAUUNLAD NG ATING EKONIMIYA)

Economic development is a process of change over a long period of time.

PARA MA MEASURE ANG ECONOMIC DEVELOPMENT, ISA SA PINAG BABASEHAN NATIN AY ANG
NATIONAL INCOME O ANG INCOME NG ATING COUNTRY. ACCORDING PO SA VISUAL MAY ISANG
GRUPO NG ECONOMISTS ANG NAGSASABING ANG PAGLAGO NG ATING NATIONAL INCOME AY KINO
CONSIDER NA BASEHAN PARA MAMEASURE ANG ATING ECONOMIC DEVELOPMENT. O DAPAT GAMITIN
ANG KITA NG ATING BANSA PARA MALAMAN ANG PROGRESS NG ATING ECONOMIC DEVELOPMENT.
ITO ANG SINASABING MOST SUITABLE INDEX OF DEVELOPMENT.

1. National Income as an Index of Development:

There is a group of certain economists which maintains the growth of national income should be
considered most suitable index of economic development. For this purpose, net national product (NNP)
is preferred to gross national product (GNP) as it gives a better idea about the progress of a nation.

A. Arguments against National Income:

PERO NGUNIT DATAPWAT MAYROON PA RIN SHORTCOMINGS ANG NATIONAL INCOME PARA MA
MEASUREMENT ANG ECONOMIC DEVELOPMENT.

Despite the favorable arguments, national income as a measure of economic development suffers
from certain shortcomings:

(i) It cannot definitely be said that economic welfare has increased if the
national and even the per capita income may be rising unless the
distribution of income is equitable.

UNA KUNG TUMATAAS ANG NATIONAL INCOME NATIN EVEN THE PER CAPITA INCOME AY HINDI PA RIN
MASASABI NA TUMATAAS DIN ANG ATING ECONOMIC WELFARE. ANO NGA BA ANG ECONOMIC
WELFARE? ITO AY ANG LEVEL OF PROSPERITY OR STANDARD LIVING NG INDIVIDUAL OR GROUP OF
PERSON. SO KAHIT TUMATAAS ANG NATIONAL INCOME NATIN , HINDI PA RIN NATIN MASASABI NA
TUMATAAS RIN ANG ECONOMIC WELFARE UNLESS KUNG YUNG SWELDO NG MGA EMPLOYEE AY
EQUALLY DISTRIBUTED. LIKE PANTAY PANTAY KUNG ANO YUNG MANILA RATE SANA SAME LEVEL LANG
DIN SA MGA PROVINCIAL RATE.

(ii) Expansion of national and per capita income cannot be identified with
enrichment because the composition of the total output is also important.
For example, an expansion of total output could be accompanied by a
depletion of natural resources or it could compose of only armaments or
could consist of merely a greater output of capital goods.
NEXT, KAPAG PAPALAWAKIN OR PALALAKIHIN ANG NATIONAL INCOME AT PER CAPITA INCOME
KASAMA OR RULE NA TALAGA ANG MA REDUCE ANG NATURAL RESOURCES. DAHIL NAHG POPRODUCE
NG MALALAKING OUTPUT PARA SA INRICHMENT NG COUNTRY. ALTHOUGH NAMEMEASURE YUNG PER
CAPITA INCOME AND NATIONAL INCOME HINDI MAIIWASAN ANG DEPLETION NG NATURAL
RESOURCES.

(iii) It must not only consider what is produced but also how it is produced. It
is possible that when real national output grows, the real costs i.e., ‘pain
and sacrifice’ of the society may also grow.

PANGATLO, HINDI LANG DAPAT MAKA PRODUCE ANG ICONSIDER, DAPAT PATI KUNG PAANO RIN ITO
PINOPRODUCED. DAPAT LAGYAN NATIN NG QUALITY ANG MGA GINAGAWA NATIN HINDI PARA
MAKAGAWA LANG. KASI KUNG MAGANDA ANG PRODUCTION NATIN POSIBLENG ANG NATIONAL
OUTPUT NATIN AY LUMAGO AS WELL AS YUNG MGA PINAGHIRAPAN AT PINAG PAGUDAN NG ATING
MANG GAGAWA AY MA PAID OFF DIN.

(iv) It is difficult to determine proper deflators to eliminate the effects of

price changes in an underdeveloped country.

PANG APAT, HIRAP IDETERMINE ANG PROPER DEFLATORS NA MAKAKATULONG TO ELIMINATE THE
EFFECTS OF PRICE CHANGE IN UNDERDEVELOP COUNTRY. THERE ARE MANY DEFLATOR KASI LIKE FOR
EXAMPLE CONSUMER PRICE INDEX DEFLATOR AND GROSS DOMESTIC PRODUCT DEFLATOR. IT GIVES
INFORMATION ABOUT THE SIZE OF THE ECONOMY AND HOW AN ECONOMY IS PERFORMING.SO HIRAP I
DETERMINE KUNG ANONG DEFLATOR ANG PROPER PARA MAKATULONG SA UNDERDEVELOPED
COUNTRY.

(iv) It is also complicated when average income is rising but unemployment

exists due to the rapid growth of population, thus, such a situation is not
consistent with the development.

PANG HULI, MAHIRAP DIN GAMITIN ANG NATIONAL INCOME AS INDEX OF DEVELOPMENT IF THE
UNEMPLOYMENT IS EXISTING. DUE TO RAPID GROWTH OF POPULATION. IBIG SABIHIN KAHIT
TUMATAAS ANG AVERAGE INCOME HINDI PA RIN MAGIGING CONSISTENT ANG DEVELOPMENT NG
COUNTRY BECAUSE SA DAMI POPULATION MAHIRAP MAGHANAP NG WORK AND IN THAT CASE HINDI
LAHAT NG INDIVIDUAL MAGKAKAROON NG AVERAGE INCOME NA POSIBLENG MAG SSTOP SA
CONSISTENCY NG DEVELOPMENT.

2. Per Capita Real Income

( KITA NG BAWAT TAO )

Some economists believe that economic growth is meaningless if it does not improve the standard
of living of the common masses. Thus, they say that the meaning of economic development is to
increase aggregate output. Such a view holds that economic development be defined as a process by
which the real per capita income increases over a long period time.
 ACCORDING SA VISUAL SOME ECONOMISTS BELIEVE NA ANG PAGLAGO NG EKONOMIYA AY
MEANINGLESS KUNG HINDI NAMAN NITO NA IIMPROVE ANG STANDARD LIVING NG KARANIWANG
TAO. THEY SAY THAT THE MEANING OF ECONOMIC DEVELOPMENT AY PARA TUMAAS ANG PINAGSAMA
SAMANG OUTPUT NG COUNTRY. IPINAPAKITA NITO NA ANG KAHULUGAN NG ECONOMIC
DEVELOPMENT AY PROSESO KUNG SAAN ANG KITA NG BAWAT TAO AY TUMATAAS HABANG
TUMATAGAL.

2.1 Arguments in favor of per Capita Real Income:

JUST LIKE NATIONAL INCOME THERE ARE SOME ARGUMENTS IN PER CAPITA REAL INCOME TOO,

HERE, SINASABI NA MAS BETTER ANG PER CAPITA INCOME KESA SA NATIONAL INCOME BECAUSE THE
AIM OF ECONOMIC DEVELOPMENT IS TO RAISE THE LIVING STANDARD OF THE PEOPLE. TROUGH
CONSUMPTION LEVEL, ITO AY MAAARIMG MA ESTIMATE GAMIT ANG KITA NG BAWAL TAO RATHER
THAN KITA NG BUONG BANSA. KUNG ANG KITA NG NATIONAL INCOME AY TUMATAAS PERO ANG PER
CAPITA INCOME IS AY HINDI, HINDI NITO MA RAISE ANG LIVING STANDARD NG MGA TAO. ALSO
MAGANDANG MEASURE NG ECONOMIC DEVELOPMENT ANG KITA NG BAWAT TAO DAHIL SA IBANG
MGA ADVANCED COUNTRIES, MAS MATAAS ANG GROWTH RATE NG NATIONAL INCOME NILA KAYSA
SA GROWTH NG POPULATION AT DAHIL DOON CONTINUOUS ANG KITA NG BAWAT TAO SA KANILA. IN
UNDERDEVELOPED COUNTRIES NAMAN, VERY LESS ANG CAPACITY NILA MAG PRODUCE PER HEAD .SO
KUNG TATAAS ANG MAPRODUCE NILA PER HEAD MAGRERESULT ITO NG ECONOMIC DEVELOPMENT.

SO I GUESS DITO IPINAPAKITA LANG NA MAS MAGANDA GAMITIN ANG PER CAPITA INCOME COMPARE
SA NATIONAL INCOME AS MEASURE OF ECONOMIC DEVELOPMENT.

The aim of economic development is to raise the living standard of the people and through this to
raise consumption level. This can be, estimated through per capita income rather than national income.
If national income of a country goes up but the per capita income is not increasing, that will not raise the
living standard of the people. That way, per capita income is a better measure of economic development
than the national income.

The increase in per capita income is a good measure of economic development. In the advanced
countries, per capita income has been on continuous increases because the growth rate of national
income is greater than the growth rate of population. This has raised the economic lot of the people. In
underdeveloped countries, there is very less capacity to produce per head. So, as the capacity to
produce goes up these economies proceed towards economic development.