Question

Think of various indicators of development that you would like to see in your concept of “economic development.” Think about why per capita income, as measured, may or may not be a good proxy for these indicators. Can you suggest a better alternative?

Answer 1

one of the reasons why it can be mentioned that GDP per capita is a better indicators for economic development is that the population of the country is taken into account and this tells about the figure and can easily be compared with the other countries and their living standards and understand where the country is actually standing. it is relative li easy to measure once the GDP of the country is established as population is the only additional factor to it and another benefit of taking GDP per capita as a mint of economic indicator is that which sectors of the economy is lacking can be identified and focus can be put on that very easily but there are also certain disadvantages as this doesn't show the social gaps that lie within the country such as economic inequality and poverty and therefore One better alternative that can cover of these disadvantages is Human Development index when clubbed with GDP per capita can overall be a better indicator