Comparison of GDP and the Human Development Index (HDI).
This assignment exposes students to data on economic growth and development as commonly measured by per capita GDP and the Human Development Index (HDI) for 100 countries of the world. There is a big debate about how good an indicator HDI is compared to GDP per capita as a measure of development. In class students learn how to calculate the HDI. They also read a seminal paper by Allen Kelley that discusses pitfalls of both measures.
- In this exercise they will collect the three variables that are used in the HDI calculations from the latest Human Development Report published by the United Nations Development Program (UNDP) for 100 countries.
- They will calculate the HDI and then compare it with the GDP per capita variable.
- They would then replicate Allen Kelley's paper.
- They will also test the sensitivity of their findings using different parameter values.
- After plotting their data in charts and graphs, they will analyze their results.
- Have a sense of the level of development in these countries and understand the role of education, health and income in economic development.
- Think critically about how the income and education and health variables are calculated.
- Identify the flaws in the estimation method used by the UNDP in calculating the HDI, specially the departure from economic theory.
- Become aware of the fact that small changes in the parameter values can change ranking of the countries significantly.
- Finally analyze their findings effectively presenting the data in an appropriate manner (tables, and graphs).
Context for Use
Description and Teaching Materials
Teaching Notes and Tips
- Accuracy in use of data
- Quality of argument
- Quality of writing
- Quality of data presentation