Development Indicators Chart

Indicator
Gross Domestic Product
(GDP)

Gross National Product

(GNP)

Purchasing Power Parity

(PPP)

Literacy Rates

Definition
Market value of all final
goods and services
produced within a country
at a given period of time.

Usefulness
Indicates standard of
living in an economy (in
terms of material goods)
Measured widely,
frequently and
consistentlyComparativ
e economic indicator of
development
Is the total value added
May be more accurate
from domestic and foreign
than GDP as it includes
sources claimed by
sources like remittances
residents of a country.
and repatriation of profits
from TNCs
Indicates SOL in an
economy
Measured widely,
frequently and
consistentlyComparativ
e
Relates average earnings to Lifts GNP/head for LDCs
the ability to buy goods.
while lowering it for DCs
(level of GNP adjusted to the
to give a more accurate
cost of living)
reflection of purchasing
power within countries.

Limitations
Quality of life may not be
reflected by material
goods alone
More of a measure of
economic activity rather
than SOL
Does not take income
disparity into account
Hides regional variations
Does not show ethnic
and racial variations
Fails to take into account
local costs of living
Does not take into
account the informal
economy
Ignores the social and
environmental cost of
economic growth
Varies dependent on
basket of goods
Difference in quality of
goods?
Price of product may vary
within a currency zone

Rate of people in a country

who are able to read and
write suitably for effective
communication

Indicates quality of life

as high education
levelhigher
employabilityhigher
SOL

Variation amongst
countries in terms of
languages
Difficulty to enforce
standards and measure
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Indicator

Definition

Usefulness
Higher literacy rates
usually indicate higher
level of development as
more funds are allocated
for education.

Limitations
rates of literacy

Indicator
Demographic Indicators
Population growth,
urban/rural population,
mortality rates, life
expectancy, etc.

Definition
Indicates nature and growth
of population over time

Usefulness
Indicates policy concerns
Indicates level of
economic and social
progress

Human Development Index

(HDI)

3 indicators of well being;

Life expectancy
Literacy
GDP per capita in PPP
US$

Limitations
Generalized overview of
development
Limited emphasis on
social and cultural
factors.
Data may not be
accurate as there may be
regional variations or
national variations in
data collection
National variations in
data collection might
still be present.
Other social aspects
not taken into account
crime rates,
pollution, quality of
life etc.

Disease Indicators (E.g.

AIDS, malaria, etc.)

No of people in a country
afflicted with disease.

Reliable
Comprehensive as it
integrates 3 indicators
Regional and racial
variations can be
reflected

Indicates health
conditions
Indicates basic amenities
and services provision

Diseases may affect

developed as well as
developing countries and
so may not be a very
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Indicator

Definition

Usefulness

Limitations
good indicator of
development
E.g. AIDS, SARS