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Jamshed uz Zaman. Human Poverty Index Human Development Index Source UNDP, Human Development Report -- Human Development Index (HDI) -- Human Poverty.

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Presentation on theme: "Jamshed uz Zaman. Human Poverty Index Human Development Index Source UNDP, Human Development Report -- Human Development Index (HDI) -- Human Poverty."— Presentation transcript:

1 Jamshed uz Zaman

2 Human Poverty Index Human Development Index Source UNDP, Human Development Report -- Human Development Index (HDI) -- Human Poverty Index (HPI)

3 Human Development Index HDI is based on Life expectancy at birth (25-85 years) Educational Attainment (Adult literacy, 2/3 weight) (0- 100%) and (combined enrolment ratios, 1/3 weight) Standard of Living (Real PCY at PPP) $100 -$40,000) (complex) Actual Value – Minimum Value Index = Maximum Value – Minimum Value

4 Example (2001) India Bangladesh Life Expectancy: 62.9 – = = Educational Attainment [56.5(2/3)+56(1/3)] ÷ 100 = 0.56 GDP = 0.52 HDI = ( )/3 = 0.57 Life expectancy: 58.9 – = = Educational Attainment [40.8(2/3) + 37(1/3)] ÷ 100 = GDP = 0.45 HDI = ( )/3 = 0.47

5 Human Poverty Index (HPI) The percentage of the population not expected to survive to the age of 40 (P1), The adult illiteracy rate (P2), A deprivation index based on average of two variables: the percentage of the population without access to safe water and the percentage of underweight children under five years old (P3).

6 Bangladesh HPI = [1/3{(21.4) 3 +(59.2) 3 +1/2(3+56) 3 }-3] 1/3 = 43.3 India HPI = [1/3{(16.7) 3 +(43.5) 3 +1/2(12+53) 3 }-3] 1/3 = 34.3 The Formula for HPI HPI = [1/3{P p P 3 3 } – 3] 1/3

7 Can the poor countries ever catch up Y Dt = current level of per capita income in developed countries say $25,000 Y DCt = current level of per capita income in poor countries say $1200 r D = per capita income growth of developed countries, r Dc = per capita income growth of poor countries, Y D* = assumed PCY in 2020, say $45,000 of developed countries r DC* = required per capita growth rate of the poor countries. How long it would take to catch up? Y Dt = Y DCt ( 1 + r DC) n Or, Or n = log(2500/1200)/log(1.02)

8 Can the poor countries ever catch up? (contd.) Or n = log(2500/1200)/log(1.02) = 153 years At a growth rate of 2% poor countries would require 153 years to reach current living standard of the developed countries.

9 Elimination of per capita income gap How many years would it take n = [log(2500/4000)] / [log(1.06)- log (1.03)] = 64 years Y Dt ( 1+r D ) n = Y DCt ( 1+r DC ) n n = [log ( Y Dt / Y DCt )]/[log(1+r DC )- log(1+r DC )] n = [log ( Y Dt / Y DCt )]/[log(1+r DC )- log(1+r DC )]

10 Thank you


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