7 Important Socio-Economic Indexes & India’s Position
The world comprises many countries. Each country has its economy and social status. When it comes to Economics, a curious learner likes to compare these countries on various parameters. There are many socio-economic indicators or indexes. Many government organizations collect the data, analyze it and publish it to the general public. This post will be highlighting the information about 7 important socio-economic indexes and India’s position on them.
There may be other socio-economic indexes that you may come across. This blog post can serve the purpose of initial trigger or push which one needs to dive deep in the study of economics. I have selected 7 socio-economic indexes which I find interesting. Additionally, I have tried to gather the information (based on the latest availability) from genuine government sources and given the reference for those sources in each of them so that you can check the information for your country.
Here The 7 Important Socio-Economic Indexes And India’s Position On Them:
The data pertaining to poverty is released in the form of a global Multidimensional Poverty Index (MPI). MPI is prepared by the Oxford Poverty and Human Development Initiative at the University of Oxford (Launched in 2010) and the Human Development Report Office of the United Nations Development Programme for the flagship Human Development Reports. It measures the complexities of poor people’s lives, individually and collectively, each year. As of now, 107 countries are included in the report and a comparison is made among them.
But how does MPI differ from Sustainable Development Goal (SDG)? The SDG aims to end poverty in all its forms everywhere. But it defines poverty only in monetary terms. Whereas today the concept of poverty has moved beyond monetary terms. MPI examines each person’s deprivations across 10 indicators in three equally weighted dimensions — health, education, and standard of living to get a holistic view.
According to Global MPI 2020, India is positioned at 62nd place out of 107 countries. NITI Aayog has been assigned the responsibility of leveraging the Global MPI monitoring mechanism to drive reforms. Following that, a Multidimensional Poverty Index Co-ordination Committee (MPICC) has been constituted to drive the reforms.
World Happiness Index is usually mentioned in the World Happiness Report. This report is prepared and published by the Sustainable Development Solution Network. The data is collected by Gallup World Poll and Lloyd’s Register Foundation. The first report was published in the year 2011.
Although the World Happiness Reports are based on a wide variety of data, the most important source has always been the Gallup World Poll, which is unique in the range and comparability of its global series of annual surveys.
India holds the 139th position out of 149 countries. The report evaluates and ranks countries based on factors like Gross Domestic Product (GDP) per person, healthy life expectancy, and residents’ opinions. Here is the snapshot of all the countries on the World Happiness Index:
This is a bit interesting. The Big-Mac Index was invented by ‘The Economist’ in 1986 to compare currencies of different countries. This is an unorthodox and lighthearted approach to measuring Purchasing Power Parity (PPP).
The comparison is made on the prices of Big-Macs. Therefore, it is also referred to as ‘Burgernomics’. Though it was never intended as a precise gauge of currency misalignment, yet it has become a global standard. It is included in several economic textbooks and subject of numerous academic studies.
But what is the reason for using a fast-food i.e. Big-Mac burger offered by McDonald’s? The reason lies in their global presence across most of the countries. Not only the presence but the demand for their burgers. The comparison is made considering the cost of a Big-Mac. The selling price may vary due to the labor costs and costs of ingredients required to make the same.
India on the Big-Mac index has been undervalued as the exchange rate pegged to the US Dollar is 54.4 in January 2021. Surprisingly, Big-Macs are not sold in India so the closest Indian equivalent is Maharaja Mac which can be considered for comparison.
Source: Read about the Big-Mac Index
Gender Parity Index
The Gender Parity Index (GPI) is a socioeconomic index that measures the relative access to education of males and females. This index is released by UNESCO. It is calculated as the quotient of the number of females by the number of males enrolled in a given stage of education (primary, secondary, etc.). If the resulting number is 1 then there is perfect equality. If it is less than 1 then it means that there is a parity between male and female. Females are given fewer educational opportunities than males if the number is less than 1. If the number is greater than 1 then female literacy is surpassing male literacy.
The comparison goes beyond just gender. It looks at various social factors like rural vs. urban areas, wealth, ethnicity, language, etc. On the official website, a detailed explanation has been provided. The World Inequality Database on Education (WIDE) highlights the powerful influence of these circumstances which play an important role in shaping their opportunities for education and life.
As per the latest available information, India has a Gender Parity Index rating of 0.96 which very close to being perfect. The number indicates that both male and female individuals are given equal educational opportunities. The data collected for this purpose relate to lower secondary completion rates in the age group from 15 to 24 years.
Here is a snapshot of the parameters on which the comparison is done:
Gini Coefficient (Index)
Gini Index is used to measure income/wealth inequality within a nation. The coefficient measures from 0 (Zero) to 100. If the Gini coefficient is zero for a country, then there is no income inequality. If the coefficient is 100 then it means there is perfect inequality in the income of individuals at different tiers. Gini coefficient of zero seems unrealistic and hence no country has the same to date.
The index is also calculated from the Lorenz curve, in which cumulative family income is plotted against the number of families arranged from the poorest to the richest.
As per the latest available data, India has a Gini Coefficient of 35.7 (based on the report of 2011).
The Passport Index
The Henley Passport Index is the only passport index based on International Air Transport Association (IATA) data. Moreover, the in-house extensive research is enhanced throughout the years, making it the most robust, credible, and reliable index of its kind.
The Henley Passport Index goes beyond a simple ranking of passports. It provides an in-depth picture of an individual’s travel freedom, including the countries one can access with which type of visa. The Index also indicates how one passport compares to other passports.
India holds 85th rank with visa-free access to 58 countries. The 1st rank is held by Japan with visa-free access to 191 countries.
The Human Development Index (HDI)
The Human Development Index (HDI) is a summary measure of average achievement in human development’s key dimensions. It is a long and healthy life, being knowledgeable and having a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions.
This index was created to emphasize that people and their capabilities should be the ultimate criteria for assessing a country’s development, not economic growth alone.
One of the more important achievements of the human development approach, as embodied in successive Human Development Reports, has been to ensure a growing acceptance of the fact that monetary measures, such as GDP per capita, are inadequate proxies of development.
India is positioned at 131st Rank out of 189 countries with an Index score of 0.645. Here is a related snapshot of different HDI parameters for India:
Data Source: HDI Data source
These are the 7 important socio-economic indexes that I consider interesting. I would love to know about other interesting socio-economic indexes. Hence, you can use the comment section to share information about them.