,QUESTION 1 [40 MARKS] Critically assess the merits of using
economic metrics such as Gross Domestic Product (GDP) per
capita versus broader multidimensional measures like the
Human Development Index (HDI) or Multidimensional Poverty
Index (MPI) for understanding development progress. 1.1
Compare and contrast the key components and methodologies of
GDP per capita, HDI, and MPI. What aspects of development
does each aim to capture? (15) 1.2 Evaluate the strengths and
limitations of GDP per capita as a measure of development
based on Amartya Sen's capability framework. How well does it
reflect people's substantive freedoms and capabilities? (15) 1.3
Analyse how the HDI and MPI incorporate the capability
approach compared to GDP per capita. Do they provide a more
comprehensive picture of development? Explain why or why
not. (10)
1.1 Comparison of GDP per Capita, HDI, and MPI
Gross Domestic Product (GDP) per Capita:
• Key Components: GDP per capita is calculated by
dividing a country's Gross Domestic Product (GDP) by its
population. It is a measure of the average economic output
per person.
• Methodology: It involves calculating the total value of
goods and services produced within a country in a given
, period and then dividing this value by the number of people
in the country.
• Aspects Captured: GDP per capita primarily captures
economic performance and average income levels. It
focuses on economic growth and productivity but does not
directly measure quality of life, income distribution, or
non-economic factors.
Human Development Index (HDI):
• Key Components: HDI combines three key dimensions:
1. Health: Measured by life expectancy at birth.
2. Education: Measured by mean years of schooling and
expected years of schooling.
3. Standard of Living: Measured by Gross National
Income (GNI) per capita adjusted for purchasing
power parity (PPP).
• Methodology: Each dimension is normalized on a scale
from 0 to 1, and the geometric mean of these indices is
used to compute the HDI.
• Aspects Captured: HDI provides a broader measure of
human development by including health and education
alongside income. It reflects improvements in life
expectancy, educational attainment, and economic
resources, offering a more holistic view of well-being.
Multidimensional Poverty Index (MPI):
• Key Components: MPI measures poverty through multiple
deprivations in three dimensions:
1. Education: Measured by years of schooling and child
school attendance.
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