Single Indicators of Development (HL IB Economics)
Revision Note
The Multidimensional Nature of Economic Development
The 17 Sustainable Development Goals demonstrate the complexity of the nature of economic development
The different elements can be separated into three categories: economic, social and environmental
Sustainable economic development occurs at the intersection of all three and is represented in the diagram below
Sustainable economic development is a multi-dimensional concept incorporating economic growth, environmental care and social progress
Viable refers to the fact that the combination of economic and environmental progress is happening with some care, however it is not sustainable in the long term
Bearable refers to the fact that the interaction of society and the environment is happening with some thought, however it is still not sustainable in the long term
Equitable refers to the fact that the interaction of the economy and society is happening with some attention to well-being, however it is still not sustainable in the long term
Due to this complexity, elements of economic development can be measured using single or composite indicators
Single Indicators of Economic Development
A single indicator is one factor, such as GDP per person (capita), used to measure the development of a country
Single indicators measures only one development characteristic within a country
1. GDP/GNI per person (per capita) at PPP
Real GDP is the value of all goods/services produced in an economy in a one-year period - and adjusted for inflation
For example, if nominal GDP is £100bn and inflation is 10% then real GDP is £90bn
GDP per capita = GDP / the population
It shows the mean wealth of each citizen in a country
This makes it easier to compare standards of living between countries:
For example, Switzerland has a much higher GDP/capita than Burundi
Gross national income (GNI) measures the income earned by citizens operating outside of the country + the GDP
Many citizens employ their resources outside of a country's borders - and then send the income home
Purchasing power parity (PPP) is a conversion factor that can be applied to GDP, GNI and GNP
PPP calculates the relative purchasing power of different currencies
It shows the number of units of a country's currency that are required to buy a product in the local economy, as $1 would buy of the same product in the USA
The aim of PPP is to help make a more accurate standard of living comparison between countries where goods/services cost different amounts
Using real GDP/Capita provides better information than real GDP as it takes population differences into account
Using real GNI/capita is a more realistic metric for analysing the income available per person than GDP/capita
Using GDP/GNI per person (per capita) at PPP allows for comparisons between countries which take into account the substantial differences in the cost of living
2. Health and education indicators
Multiple single indicators for health and education can provide useful data for comparisons between countries
Typical single health indicators include:
Infant mortality rate
Life expectancy
Number of doctors per 1,000 of the population
Diabetes incidence
Typical single education indicators include:
Youth literacy rate
Adult literacy rate
Mean years in school
Ratio girls/boys in school
Math achievement 8th grade
3. Economic/social inequality indicators
Typical single economic and societal indicators include:
The Gini Coefficient
Murders per 1000 of the population
Percentage of women in national parliaments
4. Energy indicators
Typical single energy indicators include:
Coal consumption per person
Electricity generation per person
Residential electricity usage
Oil consumption per person
5. Environmental indicators
Typical single environmental indicators include:
CO2 emissions per person
Total CO2 emissions
Agricultural water withdrawal
Primary forest area
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