Jamshed uz Zaman

Human Poverty IndexHuman Development IndexSource UNDP, Human Development Report

-- Human Development Index (HDI)-- Human Poverty Index (HPI)

Human Development IndexHDI 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 ValueIndex = -------------------------------------------

Maximum Value – Minimum Value

Example (2001)India BangladeshLife Expectancy:62.9 – 25 37.9---------- = ------ = 0.6385 - 25 60Educational Attainment[56.5(2/3)+56(1/3)] ÷ 100

= 0.56GDP = 0.52HDI = (0.63 + 0.

56+0.52)/3 = 0.57

Life expectancy:58.9 – 25 33.9---------- = ------ = 0.56585 - 25 60

Educational Attainment[40.8(2/3) + 37(1/3)] ÷

100 = 0.395GDP = 0.45HDI = (0.565 + 0.395

+0.45)/3 = 0.47

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).

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 HPIHPI = [1/3{P1

3 + p23 +

P33} – 3]1/3

Can the poor countries ever catch up

Y Dt = current level of per

capita income in developed countries say $25,000

YDCt = current level of per

capita income in poor countries say $1200

rD = per capita income

growth of developed countries,

rDc = per capita income

growth of poor countries,

Y D* = assumed PCY in

2020, say $45,000 of developed countries

rDC* = required per capita

growth rate of the poor countries.

How long it would take to catch up?

YDt = YDCt (1 + rDC)n

Or,

Or n =

log(2500/1200)/log(1.02)

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.

Elimination of per capita income gapHow many years would it take

n =[log(2500/4000)] / [log(1.06)- log (1.03)]= 64 years

YDt ( 1+rD)n = YDCt ( 1+rDC)n

n = [log(YDt/ YDCt )]/[log(1+rDC)- log(1+rDC)]

Thank you