Development Indicators ChartIndicator Definition Usefulness LimitationsGross Domestic Product (GDP) Market value of all final goods and

services produced within a country at a given period of time.

Indicates standard of living in an economy (in terms of material goods)

Measured widely, frequently and consistentlyComparative economic indicator of development

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

Gross National Product (GNP) Is the total value added from domestic and foreign sources claimed by residents of a country.

May be more accurate than GDP as it includes sources like remittances and repatriation of profits from TNCs

Indicates SOL in an economy Measured widely, frequently

and consistentlyComparative

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

Purchasing Power Parity (PPP) Relates average earnings to the ability to buy goods. (level of GNP adjusted to the cost of living)

Lifts GNP/head for LDCs while lowering it for DCs to give a more accurate reflection of purchasing power within countries.

Varies dependent on basket of goods

Difference in quality of goods? Price of product may vary

within a currency zone

Literacy Rates 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

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

Variation amongst countries in terms of languages

Difficulty to enforce standards and measure rates of literacy

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Indicator Definition Usefulness LimitationsDemographic Indicators Population growth, urban/rural population, mortality rates, life expectancy, etc.

Indicates nature and growth of population over time

Indicates policy concerns Indicates level of economic and

social progress

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

Human Development Index (HDI) 3 indicators of well being; Life expectancy Literacy GDP per capita in PPP US$

Reliable Comprehensive as it

integrates 3 indicators Regional and racial

variations can be reflected

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.

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 good indicator of development

E.g. AIDS, SARS

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