Policy research brief_07_producao.pmd

Introduction GDP per capita is by far the most popular measure of international levels of development. It is fairly well understood and widely available across countries and time. But it is also recognized that GDP per capita is an imperfect proxy for important factors such as health, education and well-being. An alternative approach has been to work directly with the variables of concern, as in the UNDP Human Development Index (HDI). The HDI combines GDP per capita with life expectancy and schooling into a single composite index. But, the HDI is difficult to compile. Moreover, because it is an index, it cannot tell us about the absolute standard of living of the underlying population: it can only provide rankings of nations at any moment in time and changes in these rankings over time.