Social and economic indicators of development

Development

Development is an increase in the standard of living of the people in a country. It includes economic factors, such as wealth, and social factors such as literacy.

Both social and economic indicators can be used to determine if a country is developed or developing, and to identify the main similarities and differences between them.

Economic indicators of development

These measure the economic output or wealth of a country. They include Gross National Product (GNP) per person, which is the value of goods produced by a country divided by the total population to give an average income for each citizen.

Problems with looking at only one indicator such as GNP are:

  • This is an average and so may be easily skewed by a few very wealthy families which may mask extreme poverty for the majority of the population.
  • It does not take into account the cost of goods which affects what people can buy with their wages.
  • How wealthy a country is does not take into account how this money is used as it does not show data on how well educated people are or how good their diet is.
  • It does not take into account differences between urban and rural areas, eg in Brazil between poor favela areas and wealthier inner cities.