ASSIGNMENT-2

Various indicators of development:

1. Human Development Index (HDI):
 It attempts to rank all the countries on a scale of 0 (lowest human
development) to 1 (highest human development) based on three goals of
development:
I. LONGEVITY: measured by life expectancy at birth
II. KNOWLEDGE: measured by a weighted average of adult literacy and
gross school enrolment ratio.
III. STANDARD OF LIVING: measured by real per capita GDP adjusted
for the differing purchasing power parity of each country’s currency.
 HDI ranks 177 countries in four groups:
I. Low Human Development (0.000 to 0.499)
II. Medium Human Development (0.500 to 0.799)
III. High Human Development (0.800 to 0.900)
IV. Very High Human Development (0.900to 1.000)
2. New Human Development Index (NHDI):
 Introduced by UNDP in November, 2010 to address some of the criticism of
HDI.
 It is still based on the three goals of development i.e. standard of living,
knowledge and longevity but with 8 notable changes:
I. GNI per capita replaces GDP per capita.
II. The education index has been completely revamped.
III. Expected educational attainment
IV. The two previous components of the education index, literacy and
enrolment, have been correspondingly dropped.
V. Maximum values in each dimension have been increased to the
observed maximum rather than given a predefined cut-off.
VI. Minimum values of income have been reduced.
VII. Rather than using common log to reflect diminishing marginal benefit
of income, the NHDI now uses ln.
VIII. NHDI is computed with a geometric mean.
3. Physical Quality of Life Index (PQLI):
 It was developed in mid-1970s by Morris David Morris due to the
dissatisfaction with the use of GNI as an indicator.
 Its parameters are:
I. Literacy rate
II. Infant mortality
III. Life expectancy
All equally weighted on a scale of 0–100.

 It can be regarded as an improvement however; it still shares the general

problems of measuring quality of life in a quantitative way.
  It has also been criticised due to considerable overlap between infant mortality
and life expectancy.
4. Gender Development Index (GDI):
 GDI is the ratio of the HDIs calculated separately for the males and females
using the same methodology as in HDI.
 It shows female HDI as a percentage of male HDI.
 GDI groups 167 countries into five groups based on the absolute deviation
from the gender parity in the HDI values. This means that it takes equal
considerations of gender gap favouring males as well as those favouring
females.
 It shows hum much women are lagging behind their male counterparts which
is useful for understanding the real gender gap in human development
achievements and is informative to design policy tools to close the gap.
5. Gender Empowerment Measure (GEM):
 GEM is a measure of inequalities between men’s and women’s opportunities
in a country.
 It combines inequalities in three areas:
I. Political participation and decision making.
II. Economic participation and decision making.
III. Power over economic resources.

 GEM attempts to measure the extent of gender inequality across all the
countries, based on estimates of women’s relative economic income,
participation in high paying positions with economic power and access to
professional and parliamentary positions.