Section A: Human Development Index (30 marks)

The Human Development Index, first developed by Amartya Sen and now maintained by the UN
Development Programme, is a measure of how “developed” a nation is. Rather than simply record the
money value of goods and services, the HDI attempts to incorporate a broader range of measures. From
2010, the index is a composite of three measures: the Life Expectancy Index (LEI), Education Index (EI)
and Income Index (II).

The Life Expectancy Index (LEI) is derived from the number of years a person is expected to live in a
particular country, in years (LE):
𝐿𝐸 − 20
𝐿𝐸𝐼 =
85 − 20
The Education Index (EI) is calculated from the mean years of schooling (MYS=average schooling for an
adult) and expected years of schooling (EYS=expected future years of schooling for a child).
𝑀𝑌𝑆 𝐸𝑌𝑆
( ) + ( 18 )
𝐸𝐼 = 15
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The Income Index (II) is calculated from the natural log of adjusted gross national income per capita. This
is the total annual income of a country, adjusted for the purchasing power of its currency, divided by the
size of its population.
𝑙𝑛(𝐺𝑁𝐼𝑝𝑐) − 𝑙𝑛(100)
𝐼𝐼 =
𝑙𝑛(75000) − 𝑙𝑛(100)

Finally, the Human Development Index (HDI) is calculated using a geometric mean of these three
indexes.
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𝐻𝐷𝐼 = √𝐿𝐸𝐼 × 𝐸𝐼 × 𝐼𝐼

GNI per Expected Mean

Country capita (2011 Schooling Schooling Life Expectancy 2017 HDI
PPP $) (Years) (Years)
Australia 43,560 22.9 12.9 83.1 0.939
United States 54,941 16.5 13.4 79.5 0.924
Japan 38,986 15.2 12.8 0.909
China 13.8 7.8 76.4 0.752
India 6,353 12.3 6.4 68.8 0.640
Table 1: Selected HDI Values (UN HDR, 2018)

1. If life expectancy (LE) for Australia, the United States and China increased by 2.75 years, by how
much would their respective LEI values change? Is LEI a linear function? What makes it
linear/nonlinear? (5 marks)

2. If mean schooling years (MYS) increases by 2.75 years for Australia, China and India, by how
much would their respective EI values change? Is EI a linear function? What makes it

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 linear/nonlinear? (5 marks)

3. If GNI per capita increases by $1,250 in Australia, India and China, by how much does the overall
HDI change? What can you say about the marginal value of income, according to the HDI? (5
marks)

4. Use Japan’s HDI value to estimate its life expectancy in 2017. (2 marks)

5. Use China’s HDI value to estimate its 2017 GNI per capita. (2 marks)

For questions 6-8 you will need to provide evidence from your own research to support your
answer. List any references used at the end of this section.

6. Does the HDI account for inequality? (3 marks)

7. Is the HDI a “better” measure of sustainable development than GDP? (3 marks)

8. A report co-authored by Amartya Sen, criticizes the index as follows:

However, the choices on the weights used to construct this (and other similar) indexes reflect
value judgements that have controversial implications: for example, adding the logarithm of
per capita GDP to the level of life expectancy (as done by the Human Development Index)
implicitly values an additional year of life expectancy in the United States as worth 20 times
an additional year of life in India. (Stiglitz et al., 2009, p. 56)
Explain this criticism. What steps have been taken to resolve this problem? (5 marks)

Section B: Food Production (25 marks)

Locate the file on iLearn titled “World Bank Population Rankings 2017.” Use the last 2 digits of your
student number to select a country from this list. For example, if your student number ends in 04 then
your designated country is Indonesia. Or if your student number ends in 75 then your designated
country is South Sudan.

1. What is your designated country? What was the estimated population of your designated
country in 2017? Let this value be known as q. (1 mark)

2. Assume the population in 2017, 𝑃0 = 𝑞/1,000, when 𝑡 = 0 and that it grows by a ratio of 𝑟
every year. Write down an expression for the population in year 𝑡. (2 marks)

3. The economist, Thomas Malthus suggested that food supplies are growing in a linear fashion.
Assume that the annual food supply is initially 𝑏 tonnes per year, and that every year it increases
by 𝑚 tonnes. Write down an expression for the food supply, in tonnes, in year 𝑡. (2 marks)

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 Assume that the initial supply of food in your designated country is equal to 𝑞/500 tonnes of food.
Let this initial supply be known as 𝑏 in the food supply equation. Note: 2017 is year t = 0.

4. If the population growth ratio, 𝑟 = 1.07 and the annual increase in food production, 𝑚 =
𝑞/10,000 tonnes. Calculate and display in a table, the values of Populationt and Foodt for 𝑡 =
0, 10, 20, 30, 40 and 50. (4 marks)

5. Using the parameters in the previous question, suppose that each person consumes one tonne
of food per year. During which year will the population begin to experience food shortages?
Derive your answer mathematically, rather than graphically. You may assume there is no food
stored from year to year. (4 marks)

6. Find the year in which the population’s demand for food exceeds 10 times its initial demand for
food in year 0. (4 marks)

7. Suppose that the population growth rate is now lower at 𝑟 = 1.02. Now find the year that the
population’s food demand exceeds 10 times its demand for food in year 0. (3 marks)

8. Practically speaking, is it inevitable that, if food is growing at a linear rate (𝑚 > 0) and
population geometrically (𝑟 > 1), that food supplies will always run out? Provide some
evidence from your own research to support your answer. List any references used at the end of
this section. (5 marks)

Section C: The Demographic Transition Model (20 marks)

Poor countries tend to have both a high birth rate, and a high death rate. As countries develop and
become richer, both of these rates tend to come down: people have fewer children, and live longer. The
Demographic Transition Model (DTM) aims to understand how a country’s population evolves as it
develops economically. The model has four stages.

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 Figure 1: A stylized representation of the four stages of the demographic transition model (Sachs 2008, p.171)

Stage 1: high birth and death rates. People living in poor countries tend to have limited access to
medical care. As a result, the crude death rate, measured as the number of deaths per thousand people
each year, tends to be quite high. Many of these deaths tend to be infants: in the absence of medical
care, young children are vulnerable to infectious and waterborne diseases. When infant mortality is
high, families living in these countries tend to have many children, which ensures that at least some
children survive. If the death and birth rates are about equal, then the population will be stable.

Stage 2: high birth rate, falling death rate. As countries develop and medical care becomes more widely
available, the crude death rate (especially for infants) drops dramatically. As the death rate falls, the
population begins to grow. The high birth rate means that many children are still being born, but fewer
people are dying.

Stage 3: low death rate, falling birth rate. As the pattern of lower mortality becomes clearer, families
adjust their expectations and start having fewer children. Further, better opportunities for women in the
workforce mean that each child born represents a higher opportunity cost. So the birth rate begins to
fall. While few countries are still in stages 1 and 2, many developing countries like India and Kenya are
still in stage 3 of the transition process.

Stage 4: low birth and death rate. This is the final, stable state of the process, where births
approximately equal deaths, and the population is stable.

India (now stage 3) 1960 1985 2010

Crude birth rate (/1000/year) 41.267 33.525 21.82
Crude death rate (/1000/year) 21.228 11.337 7.969
South Korea (now stage 4) 1960 1985 2010
Crude birth date (/1000/year) 43.963 16.2 9.4
Crude death rate (/1000/year) 14.344 6 5.1

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 Table 2: Two examples of the demographic transition. India is still in stage 3, whereas South Korea has completed the
transition process (World Bank)

We can think about changes in population in terms of mathematical functions. If the total number of
births since time t=0 is B(t), and the total number of deaths is D(t), and the initial population at t=0 is N0,
then the population at time t is

𝑁(𝑡) = 𝑁0 + 𝐵(𝑡) − 𝐷(𝑡). (1)

1. Using the data in Table 2, calculate average values for the derivatives dB(t)/dt and dD(t)/dt
between 1985 and 2010 for India. What are its units? (3 marks)

2. Are the values you found in part 1 exactly correct for the derivatives in the year 1995? Why/why
not? (3 marks)

3. Write down an expression for the derivative for the population rate of change with respect to
time. How would you interpret this expression? (3 marks)

4. Find an approximate value for dN(t)/dt for India and South Korea, between 1985 and 2010.
What does the sign (positive or negative) of these numbers tell you? Interpret the differences
between these values. (5 marks)

5. Do you expect dN(t)/dt to be largest during Stage 1, Stage 2, or Stage 3 of the demographic
transition? Why? Explain your answer in detail. (6 marks)

END OF ASSIGNMENT