HUMAN POVERTY INDEX (HPI) (INTRODUCED BY HDR 1977)

Poverty : A social phenomenon in which a section of the society is unable to fulfill even its basic necessities of life; Developing countries have mass poverty whereas developed ones have pockets of poverty.

According to HDR : Poverty is a denial of choices and opportunities for living a tolerable life.
HPI: Composite Index of different features of deprivation in the equality of life to arrive at a n aggregate judgments on the extent of poverty in a community. Variables are: o o o o % of people expected to die before the age of 40. % of adults who are illiterate. % of people without access to health services and safe water. % of underweight children under the age of 5 years.

HPI FOR 78 COUNTRIES o At the top Trinidad & Tobago, Cuba, Chile, Singapore, Costa Rica have reduced poverty to an HPI value of less than 10% (least poverty) o At the bottom Niger, Siena Leene, Burkina faso, Ethiopia, Mali, Combodia and Mozambique HPI > 34% o Out of 78 countries, in half of the countries HPI > 34% o India HPI : 36.7% (Karnataka 15%, Rajasthan, Bihar > 50%)

HDR AND POVERTY

Absolute poverty: Minimum physical quantity of cereals, pulses, milk, butter x Prices of these commodities. Relative Poverty : Income distribution in different groups i.e., top 5-10% or bottom 5-10%. Ultra poverty when a household cannot meet 80% of the FAO WHO min. calorie requirement, even when using 80% of its income to buy food. Incidence of poverty Head count ratio Poverty lines (BPL & APL)

FOR INTERNATIONAL COMPARISON 1 $ (1985 PPP$) by the World Bank 2 $ (PPP$) a day Latin America and Caribbean 4$ (1990 PPP$) a day Europe (Eastern) 14.40 $ (1985 PPP $) a day / person for industrial countries corresponding to USA

HPI -

CALCULATION

i. % of people expected to dies before the age of 40 (P1). ii. % of adults who are illiterate (P2) iii. Standard of living / overall economic provisioning % of people without access to safe water (P31) % of people without access to health services (P32) % of children (underweight/ under the age of 5 (P33)

Composite Index of

HPI =

EG. HPI FOR INDIA INDIA

P1(%) 19.4

P2(%) 48.8

P31(%) 19

P32(%) 15

P33(%) 53

HPI = 36.7

HUMAN DEVELOPMENT INDEX (HDI) HUMAN DEVELOPMENT: Process of widening peoples choices as well as raising the level of well being (shifting of focus from growth to enlargement of peoples options) Essential components of HDI EQUITY: Distribution of productive assets SUSTAINABILITY: of worthwhile life opportunities, not human deprivation. PRODUCTIVITY: To get maximum potential EPOWERMENT: Position to exercise choices

Investment in education
Access to productive assets and credit Equal chance to men and women irrespective sex, caste, creed, political freedom

BASIC INDICATORS ECONOMIC & SOCIAL FACTORS COMBINED TOGETHER TO ATTAIN SYNERY LONGEVITY KNOWLEDGE STANDARD OF LIVING

Life expectancy at birth

Adult literacy & Enrolment ratio

Real GDP Per capita - $PPP

CONSTRUCTION OF HDI
1. Fixed minimum and maximum values are established (to overcome unit bias) i. Life Expectancy Index (LEI) Life expectancy at Birth : 25 years and 85 years

ii. Education Attainment Index Adult literacy (2/3rd weight) : Combined gross enrolment Ratio (primary, see tertiary - 1/3rd weight) :

0% and 100%

0% and 100%

iii. Adjusted Real Per Capita ($PPP) Index Real GDP / Capital (S PPP) : $ 100 and $ 40000 (per annum) Discounted value of maximum income : Atkinsons formula Discounted value of maximum income of $ 40000 (PPP $) = 6154 (PPP$) HDI = LEI + EAI + ARPCI/3 Equal weights were assigned to all

2. For any component of HDI, individual indices are calculated by the general formula

e.g. if life expectancy at birth is 60 years

ADULT LITERACY

INDEX

COMBINED PRIMARY, SECONDARY & TERITARY ENROLMENT RATIO INDEX

EDUCATIONAL ATTAINMENT INDEX (EAI) = [2(0.967) + 1(0.820)] 3 = 0.918 ADJUSTED REAL GDP PER CAPITA (PPP$) INDEX

HDI - SINGLE AVERAGE OF ABOVE 3 INDICES (EQUAL WTS.)

0.972