Wednesday, January 11, 2012

Which is a better method of calculating development: HDI or GDP per capita?

Whenever you have two measures of something and one is
more complex, the more complex measure is likely to be the better one.  I would argue
that this is the case with HDI and GDP per capita.


When we
talk about "development," we usually mean the overall development of a country, not just
its wealth.  For example, a country that had oil deposits could become very wealthy in
terms of GDP.  But if that country did not offer its people opportunities for education
and did not provide them with good health care, we would not really think of it as a
"developed" country.


GDP measures only economics.  The HDI
at least factors in things that pertain to the quality of lives that people lead. 
Therefore, the HDI is better than GDP as a measure of development even though it is in
no way perfect.

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