Improving Measures of Economic Development

SINCE the essence of economic development focuses on people, it is appropriate to define development in terms of people. Economic development is the improvement in the quantity or quality of the goods and services available per person in a society. Thus, to development it is necessary to the improvement in the quantity and quality of goods and services available, that is, the real level of living (in physical terms) of the inhabitants of a region. Present measures of development are not exact measures of the real level of living. They can be criticized in two ways. First, these measures often do not focus on people, but upon some other resource. How often have conservationists been typified as preserving a resource rather than using it for the welfare of people? The focal point of the human resource is eloquently attested to by J. L. Fisher. is easy for enthusiasts for forests, pure water, and wildlife to become so engrossed in the preservation and conservation of these resources that they forget the human resources side. But it is primarily for people that resources are conserved and developed; and it is people who do the conserving and developing insofar as these do not take place through processes of nature. More than this, people give to natural resources their very definition [4, p. 1]. Second, present measures of development are statistics which only approximate in a very rough manner changes in the real level of living of people. While the real level of living is the heart of the development problem, present measures of development, such as income per capita, gross national product, and indexes of consumption levels, do not precisely the real level of living. The use of these approximate measures should not be criticized too severely. M. Bailey suggests that generally speaking no data are available on the exact variable that the investigator wishes to measure, but only data covering more or less the things he wants to measure [1, p. 192]. The following discussion examines in detail the second criticism outlined above by specifying the weaknesses and strengths of the presently used measures of development. It suggests an improved which would more adequately reflect the real level of living of the people in a region by introducing regional differences in the cost of living.