Alexander Khoury
11/7/2014
Review of Index Building Methodologies
Introduction:
In recent decades, academics, policymakers and non-governmental organizations have placed greater focus on establishing more comprehensive metrics of well-being and development ##. Measures of national welfare have conventionally centered on a fairly narrow band of economic considerations, such as gross domestic product (GDP) and employment rate. Poverty and wellbeing are now widely understood as multifaceted concepts which cannot be adequately described through measurements of income alone. Economists and development experts are faced with the challenge of constructing metrics to distill the various components of wellbeing into an easily comparable index. The following summarizes the most salient contemporary methods of index construction and provide a brief overview of their strengths and weaknesses.
Transformation Functions: In order to build a multi-dimensional index it is first necessary to convert the various components deemed relevant into a comparable, aggregatable set of units. That is, to find a way to bring variables like average income (which may be expect to fall in the range of tens of thousands of dollars) and life expectancy (which would rarely exceed 90 years) into the same scale of measurement. The mathematical tools used to accomplish this task are known as transformation functions. We can sort the transformation functions which are relevant to index formation into five
Poverty as defined by The World Bank (2000:15) is ‘pronounced deprivation in well-being’. Well being on the other hand is maintaining a good
Economic well-being: not being prevented by economic disadvantage from achieving their full potential in life.
As a high-income society, the United States when comparing the health care statistics to others world-wide is one of the most blessed nations in the world, but many people who struggle to pay for their health care find that our health care system has many weaknesses that effect the overall quality of care and their personal well-being. Health is defined by the World Health Organization as “a state of complete physical, mental, and social well-being” (Macionis 236). There are many degrees of both physical and mental health and most people fall short of complete health and find themselves in need of medical care. One indicator that is used to measure a society’s overall health is the infant mortality rate, which is “the number of babies who die before their first birthday out of every thousand babies born” (Macionis 236). As expected, America’s infant mortality rates are low especially when coming comparing the rates to countries that are known to have economic hardships. Another means to measure the overall health well-being of a society is by determining the life expectancy at birth or the number of years that a person is expected to live in a given society. High-income nation’s life-expectancy rates are higher and most people can live long lives without serious health conditions until later in life. Low-income nations unfortunately can have much lower life expectancies. The economy and livelihood of a
Factors that determine poverty are gross national product, per capita income and industrialization. To broaden the scope of measuring quality of life Human Development Index came into force. It is the summary measure of average achievements in key dimensions of human developments, which illustrates long and healthy life and to have a decent standard of living.
Poverty and income inequality is an enormous obstacle in which certain Americans may face daily. Poverty refers to economic or income deprivation (Iceland 2006). Some may refer to poverty as having material hardships, or having one’s income and assets compared against a standard. If an individual’s income falls below the standard, they’re considered “poor” (Newman and O’Brien 2011). Poverty may be currently measured in two common ways, either through an absolute measure or relative. The poverty measure I am proposing would be looking at “family/couple/household” as the unit of analysis, cost of food, childcare, housing, and transportation as scale of resources, and the threshold will be using a more relative dimensional perspective.
Wellbeing is ‘generally understood as the quality of people’s lives. It is a dynamic state that is enhanced when people can fulfil their personal and social goals. It is understood both in relation to objective measures, such as household income, educational resources and health status; and subjective indicators such as happiness, perceptions of quality of life and life satisfaction, (Statham and Chase 2010).’ It is important to acknowledge many factors play a role in measuring childhood well-being but it is necessary to look at both positive and negative indicators in orders to get a realistic overview as well as an overall understanding of well-being as a whole. Throughout the course of this essay both subjective and objective aspects of children’s well-being will be discussed as well as how the value of measuring both aspects can enable us to gain a holistic understanding of childhood well-being.
Within Australia there are many conflicting views on what poverty means and this is reflected in most of the literature. Absolute poverty occurs when families do not have sufficient income to pay for such basic necessities as food and housing. However, the World Bank (1990) defines poverty as, the inability to attain a minimal standard of living. This definition of poverty reflects the more relative nature of poverty within Australia and this view is largely accepted and utilised within current research (ABS, 1998; Henderson, 1975; Australian Bureau of Statistics, 1998; Saunders, 1998; Harding and Szukalska, 2000; Harding et al., 2001b; Saunders et al., 2007). For Saunders, relative poverty is the depravation of resources required to participate in the maintenance of everyday lifestyle and
Life expectancy: The average number of years a newborn child would live if current mortality patterns were to stay the same. Life expectancy is an indicator of wellbeing because the higher the GDP the longer you will live because you can afford medicine and healthcare to take care of yourself and the healthier your body is then the longer live.
The Organization for Economic Cooperation and Development (OECD) claims that a person’s income, education level, and their housing situation plays a big role in their happiness. Income specifically has a huge impact. The Organization for Economic Cooperation and Development (OECD) is a forum where 34 democracies with market economies work with each other, as well
Even if we use the word “happiness” on daily basis, has anyone ever tried to define it? It’s harder than it seems. When do you feel happy? How is it when you feel happy? Is there any way to understand how much happiness to you experience? This is the main hypothesis of this paper – Can happiness or wellbeing be measured? And if it can be measured, how do we measure it? Happiness is feeling pleasure and enjoyment because of your life, situation (Meriam Webster). Pleasure and enjoyment are very subjective and means different things to different people. This is where the term subjective wellbeing comes from. There are a lot of things that can be included when measuring wellbeing. Various studies have been conducted to assess wellbeing and how does it affect other factors. For example Earlstin(1995) and later on Ferrer-i-Carbonell(2005) have examined the relationship between income and happiness. Gruber(2004) studies the relationship cigarette taxation and happier smokers. Richard, Clark, Gerogellis and Diener(2004) analyze the effect of unemployment on wellbeing.
Currently the United Nations Educational, Scientific, and Cultural Organization defines poverty in two ways. The first is absolute poverty which “measures poverty in relation to the amount of money necessary to meet basic needs such as food, clothing, and shelter” (Poverty). However, this is not comprehensive as it says nothing of the cultural or political context, and hence, “relative poverty defines poverty in relation to the economic status of other members of the society” (Poverty). Ernest-Marie Mbonda describes in her article “Poverty as Violation of Human Rights: Towards a Right to Non-Poverty” that not only does this require that the basic needs of each individual is met, but it also necessitates that the person is able to live in a state with a certain amount of dignity (Mbonda 2). Poverty surely exists everywhere and in every country, but the world’s most destitute populations are concentrated in three regions: Sub-Saharan Africa is home to 46.4% of the world’s poor people, Southern Asia has 29.9%, and Eastern Asia has 16.6% (Pathak 89). This reflects the growing pattern of global inequality, where the developed world and the developing world have very different
In order to answer the question of if income contributes to the foundation of prosperity I will look into different levels of income between middle-class, lower-class, and higher-class individuals, examining the factors that withhold — or propel — individuals from increasing overall income. In addition, I will examine the relation between income inequality and happiness held for lower income earners, and factors that contribute to the linkage of well-being. To achieve this, I will examine data representative of survey research — conducted globally at different countries — telling levels of income, and comparing those levels of income to respondents overall responses to the question of happiness. Income has closer relations to satisfaction,
Gather information for to develop a policy; there are two methods: Field research: conducting interviews and collecting original data. Document research: reviewing relevant literature dealing with both theory and evidence and locating existing source of raw data. However, for a policy addressing guns in schools will use Document research method
When refer to define poverty, the difference between the traditional unidimensional approach and contemporary multidimensional approach for the measurement of poverty should be considered. While only one variable is submitted in terms of the traditional approach, for example, consumption or income, multidimensional approach, for example, Sen’s capability theory, expands the amount of dimensions alongside which poverty is determined. The multifaceted reality of poverty, conversely, makes it tricky to confine the essence of this experience by means of a single uni- or multidimensional approaches for measurement (Fusco, 2003).
Tiwari M, (2008) argues that some researchers emphasizes on the qualitative and holistic approach to measure poverty.A more holistic understanding of poverty and wellbeing will have important