Question: An Alternative to GDP: The Human Development Index What are the other aspects of nation’s well-being you think are missing from both HDI and GDP (or GNI) measures?
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HDI assesses a country’s development by taking into account macroeconomic factors such as income, education level, and health status. The life expectancy rate indicates one’s health status. The per capita income level represents income. The indicator of expected years of schooling is used to assess education. As a result, it gauges a country’s socioeconomic position and aids in global comparisons of various nations. Economists feel that the HDI is a more reliable predictor of economic progress than GDP since it takes into account other characteristics like education and health.
GDP is the market worth of all final products and services produced inside a country in a specific time period. HD is a summary measure of development issued by UNDP United Nations Development Program that combines data on life expectancy at birth, adult literacy, educational enrollment, and average income (measured as GDP per capita) GDP measures National output, National income, and National Expenditure. GDP per capita provides a rough estimate of the average income per person in the country.There is a link between HDI and GDP; when GDP rises, so does HDI, implying that HDI can be viewed as an alternative. GDP as a measure of a country’s economy makes sense because it simply measures how much purchasing power a country has over a certain time period. GDP is also utilized as a measure of a country’s overall quality of life because GDP raises a country’s standard of living.Unpaid volunteer labor is not included in GDP Volunteering reduces GDP by performing tasks that would otherwise be performed by a paid employee or contractor.
Unlike HDI, which encompasses a wide range of factors that contribute to the formation of a country, GDP cannot tell you much about crucial topics like as human development literature rates and life expectancy. This measure has been chastised for a number of reasons, including an incorrect assessment of income, a lack of year-to-year comparability, and judging development in various groupings of countries differently.
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