Using the information provided in Table 1 below, answer the following questions
ID: 1138939 • Letter: U
Question
Using the information provided in Table 1 below, answer the following questions regarding the New Human Development Index (NHDI):
Calculate the income index, life expectancy index, and education index for Ecuador.
From (i) calculate the New Human Development Index for Ecuador.
Based on your answer in (ii), how does the NHDI rank Ecuador in terms of human development?
Fictitious Data on Ecuador Economic Indictor Value PPP GNI per capita $ 11,350 Life Expectancy 65 Expected years of schooling 14.5 Mean years of schooling 9.5Explanation / Answer
Answer:-
Income Index is the index of a country's Gross National Income which is the income claimed by the residents of the country, product taxes etc. The Income Index is one among the Human Development Index (HDI), which is used to rank countries based on their income per capita, life expectancy and education development.
It is calculated using the following formulae.
Income Index (II) = [ln(GNIpc) - ln(100)] / [ln(75000) - ln(100)]
Solution
Income index=[ln(11350)-Ln(100)/[ln(75000) - ln(100)]
Formula:
LEI = (LE - 20) / (85 - 20) Where, LEI =Life Expectancy Index LE = Life Expectancy
Therefore for Ecuador,
LEI=(65-20)/85-20
=45/65=0.692
3) The Education Index (EI) is calculated from the Mean years of attending school (MYS) and the Average expected years of schooling (EYS). 'Mean years of schooling' is indexed by dividing by 15 and 'Expected years of schooling' is indexed by dividing by 18. It is obtained by averaging these two indices.
Formulae:-
EI = ((MYS / 15) + (EYS / 18)) /2
= {(9.5/15)+ (14.5/18)}/2
={0.633+0.80)/2
=1.438/2
=0.719
Human Development Index-
The human development index is the sum total of all of these factors and the index values. It is the combined statistics of a human life expectancy, income and education is the human development index (HDI)
Formulae:-
HDI = (LEI × EI × II)
Detailed explaination on each of the formulaes above is already given above.
Therefore HDI of ecuador is calculated using the above indexes calculated.
HDI= 0.714 *0.692 *0.719
=0.355
=0.708
2) Ecuadors NHDI rank as off data from 2012 is ranked at 89 out of 187 countries. It is ranked as high human development category.
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