Definition

There are a few important parameters or characteristics to compare between different countries or states.

Income

It is one of the most important attributes. Countries with higher income are considered more developed. Why? Because money can get you more things which humans need.

Total Income

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However, total income is not a good way of measurement. Because every country has a different amount of population, thus the total income will also be different. Thus we take Average Income as the unit of measurement for income.

Classification criteria by World Bank

  • Countries having >= USD 49,000 average income are classified as high income / rich countries.
  • Countries having USD 2500 average income are classified as low income countries.
  • India falls in low middle category (with USD 6700 as per-capita income).

Why take USD as global currency

Because of good economy. But the monopoly is ending.

At first it used to be Barter System for global transactions, then came Gold, which became obsolete due to the lack of security. Then USD became the global currency.

Downsides of average income

It does not tell the distribution of money among people.

For example, in country A, 5 people having 500 USD each will have an average of 500. and in country B, 4 people having 0 and 1 person having 2500 will also have an average of 500.

Education and Health

Income cannot be the only factor to compare between states or countries, thus we have some more parameters which include educational and health aspects, such as:

BMI

Body Mass Index, used to verify the health aspect.

Formula

World bank vs United Nations Development Program

World Bank

It considers the materialistic aspect for development.

  • Avg. Income, etc.

UNDP

It considers the non-materialistic aspects of life

  • Education and health, Public Facilities, safety, etc.

Some countries value quality of life over income such as Nepal. HDI = Human Development Index


Backlinks

How to compare different countries or states


Flashcards

What are the different characteristics on comparing different states or countries? ?

  • Per-capita income
  • Life Expectancy
  • Literacy Rate
  • Net attendance ratio
  • BMI
  • Human Rights
  • Safety
  • Infant mortality rate

Why is total income not an ideal way to measure? ? Because every country has a different amount of population, thus the total income will also be different. Thus we take Average Income as the unit of measurement for income.

Why are countries with higher income are considered more developed? ? Because money can get you more things which humans need, thus more fulfillment.

What are the criteria of classification of countries based on income? ?

  • Countries having >= USD 49,000 average income are classified as high income / rich countries.
  • Countries having USD 2500 average income are classified as low income countries.
  • India falls in low middle category (with USD 6700 as per-capita income).

What is the downside of taking average income as a characteristic? ? It does not tell the distribution of money among people. For example, in country A, 5 people having 500 USD each will have an average of 500. and in country B, 4 people having 0 and 1 person having 2500 will also have an average of 500.

What is BMI and its formula? ? Body Mass Index, used to verify the health aspect.

Formula

Developmental criterias in UNDP vs WB? ?

World Bank

It considers the materialistic aspect for development.

  • Avg. Income, etc.

UNDP

Apart from income, It also considers the non-materialistic aspects of life

  • Education and health, Public Facilities, safety, etc.

HDI = {{Human Development Index}}