I need help answering this question

Question

What effects do you think continually increasing populations have on the ability of developing countries to raise their Human Development Index? Will the population growth help raise or lower their Human Development Index? Why?

Answer 1

Hi Chontra,

 

The best way to answer these types of questions - which arise often in economics and political science - is to go to the formula. Once you have that, a little algebra will take you home.

 

First, an explanation of HDI. Income (usually, as measured by GDP per capita) is often the only quantity used by economists to assess the welfare of a nation's people. 

 

The HDI, by contrast, also measures health and education. It is an index constructed from three indices, one each of health, education, and income.

 

Here are formulas for the components:

 

 

HEALTH INDEX (AS MEASURED BY LIFE EXPECTANCY), LEI

 

LEI = (LE - 20) / (85-20), LE is life expectancy

 

 

EDUCATION INDEX, EI

 

EI = (MYSI + EYSI)/2, where

 

MYSI = MYS/15, where MYSI is the mean years of schooling index and MYS is mean years of schooling

 

EYSI = EYS/18, where EYSI is the expected years of schooling index and EYS is the expected years of schooling

 

 

INCOME INDEX, II

 

II = [ln(GNI per capita) - ln(100)]/[ln(75,000) - ln(100)]

 

 

The geometric means of these components equals the HDI = [LEI * HI * II]^(1/3)

 

The question is, what happens to the HDI when population increases? I am going to assume that your teacher wants to know what happens when population increases and nothing else changes. Population goes up, ceteris paribus.

 

The way to answer that is to ask, what factors of the HDI are affected by an increase in population? Then, what is the cumulative effect of those changes on HDI?

 

Let's look at the variables in HDI:

 

LE, MYS, EYS, and GNI per capita. Which of these directly depend on population? (One could argue that an increasing population will affect all of them, since an increase in population probably never happens in isolation. E.g., more people means school system serves students less effectively, so mean years of schooling goes down. However, social scientists often ignore those real-life contingencies when analyzing things theoretically.)

 

Life expectancy (LE) doesn't; that depends on health conditions.

 

Mean years of schooling (MYS) and expected years of schooling (EYS) don't; they depend on the education system.

 

GNI per capita, however, does. It is literally gross national income divided by population. So what happens to GNI when population goes up? GNI per capita = GNI/population.

 

OK - so now you have that answer. Population goes up, GNI per capita goes _____.

 

Now take that answer and look at II.

 

II = [ln(GNI per capita) - ln(100)]/[ln(75,000) - ln(100)]

 

Where is GNI per capita in this equation? How do changes in it affect II? Don't be afraid to plug numbers directly in. You should get an answer to: Population goes up, GNI per capita goes _____, II goes _____.

 

 

Let's turn to how that affects HDI.

 

HDI = [LEI * EI * II]^(1/3)

 

This is practically the end. You know that II goes _____. What happens to HDI when II does that?

 

The final chain of reasoning is this: population goes up, GNI per capita goes ______, II goes _____, HDI goes _____.

 

Whew! I hope this helps.

 

Best of luck,

Bryce