Measurements of Economic Development: Explained

Introduction

  • Economic development is an activity or a concept by which an assessment of available resources, core competency, innovation and technology, increase the human value. When all the segment of the nation can benefit from the economic efficiency. 
  • Economic development is a broad concept to understand but in short it is a kind of policy by which the well-being of population increases.
  • Economic development is a procedure by which a nation increases the wellbeing of the people by economic, political, and social growth. The main aim of economic development is to increase the value of living.

Measures of Economic Development

In an economy, there are a number of measures taken to measure economic development.
1. Increase in real gross national product
2. Increase in real per capita income
3. Physical quality of life expediency:

  • Infant Mortality Rate (IMR)
  • Life Expectancy 

4. Human development index:
  • Life Longevity.
  • Education.
  • Standard of living.
  • Purchasing power of parity.
5. Human capabilities:
  • Free from starvation.
  • Free from hunger.
  • Free from undernourishment.
  • Free from participation in communal life.
  • Adequate shelter

Increase in real gross national product per capita

Gross national product (GNP) is the total value of all the goods and services produced by a country’s residents and businesses. GNP counts the investments made by foreign residents and businesses inside and outside the country.
GNP per capita is measurement technique used to measure GNP of countries with other countries.

Formula:
Gross National Product/Population Size of Country
GNP= consumption + investment + government + net exports + net income of domestic resident from overseas investment.

Increase in per capita real income:

Per Capita Real Income (PCRI) is a measurement of income, which is divided by population of the country.  It indicates how country is going. If it increases it means it has achieved economic goals.

Physical quality of life expediency

According to Morris D Morris: Physical Quality of Life Index (PQLI) is a measurement by which the needs of people measured. The range of indicators such as health, education, water conditions, nutrition and sanitation.
The main indicators are as under;
  • Infant Mortality Rate (IMR)
  • It refers to the death of children less than age of one year. In IMR, the number of deaths of children, not more than the age of 1 year to per 1000 live births.

Life Expectancy

Life expectancy means to measure the average time of an organism to live based on the year of their birth, their current age and other demographic factors.

Human development index

Human development index is a tool used to measure the quality of life by USA. It includes long and healthy life and overall wellbeing of people. It also includes literacy rate, the standard of living, and purchasing power of parity.

Human capabilities

Human capabilities include freedom of choices to people what to do and what not to do by themselves. It increases the self-respect, active participation, freedom to take a decision, it increases will power of people. So, It will automatically lead to better life for all.
The factors of Human Capabilities are as under;
  • Free from starvation.
  • Free from hunger.
  • Free from under nourishment.
  • Free from participation in communal life.
  • Adequate shelter.

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