Cambridge International as and a level Economics Ebook

Measurable Economic Welfare (MEW): 
a composite measure 
of living standards that adjusts GDP for factors that reduce living 
standards and factors that improve living standards.
Human Development Index (HDI): 
a composite measure 
of living standards that includes GNI per head, education 
and life expectancy.
KEY TERMS
Th
e HDI value for a country shows the distance a country 
has to cover to reach the maximum value of 1. Countries are 
divided into very high human development, high human 
development, medium human development and low human 
development. A country’s ranking by HDI does not always 
match its ranking in terms of real GDP per head. Indeed, 
in some cases there are marked diff erences. For example, in 
2012 Cuba’s HDI ranking was signifi cantly higher than its 
GNI per head ranking while Qatar’s GNI per head ranking 
was signifi cantly higher than its HDI ranking.
Table 9.2
 shows details on the ten countries with the 
highest HDI rankings and the ten with the lowest HDI 
rankings in 2012.
A more recent composite measure is the 
Multidimensional Poverty Index (MPI).
Th
is was developed 
in 2010 by the Oxford Poverty and Human Development 
Initiative and the United Nations Development Programme. 
It measures indicators of living standards (cooking fuel, 
sanitation, safe drinking water, fl oor space and assets), 
education (years of schooling and school attendance) and 
health (child mortality and nourishment). Th
e six indicat ors 
of living standards are given a total weighting of 33%, the two 
indicators of education a total weighting of 33% and similarly 
the two indicators of health have a weighting of 33%. A 
household is considered to be multidimensionally poor if 
they are deprived in at least 33% of the weighted indicat ors. 
Th
is means a family would be regarded as poor if it has lost a 
child and has another child who is not attending school.