# Econ of Developing Countries

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Homework 1

## Calculating the NHDI on Excel

You need to have finished the response sheet and seen all the videos and learned the skills before doing this homework. Also, this homework as well as all others need to be printed as PDF as explained below.

Follow the following instructions to do the homework:

1. Go to the technical notes to compute the NHDI through this link: http://hdr.undp.org/sites/default/files/hdr_2013_en_technotes.pdf

1. Go to Page 2. There are two tables: (1) Goalposts for the HDI (2) Table for Ghana. Input both tables in your excel sheet in a very organized and clear manner. You can stack them on top of each other or next to each other. You decide. Use formatting techniques you learned to make them look like a table. You can color it or bold it as you see fit. Just make sure you make the tables stick out on the sheet.

1. Underneath the tables, calculate the NHDI entirely on Excel. Use formulas as you see fit. BECAREFUL HERE:Don’t simply input the numbers, I want you to use call references to do the math. In other words, don’t re-enter the number but reference them through the cells from the table you created in (2). Do the calculation in several steps as follows:
1. Calculate each one of the dimension indices: Life Expectancy, Mean years of Schooling, Expected Years of Schooling, and Income Index
2. Reference the Mean Years of Schooling and Expected Years of Schooling cells to calculate the Education Index
3. Calculate the final NHDI using the previous calculations

When you do this, your NHDI will automatically update as soon as you change any number in the original table. This is because your formulas are all interrelated.  Change a number to check? Did your Final NHDI change? If it did, then you are doing this correctly.

1. I need you to organize your submission as follows:
1. Write the general formula to calculate each index underneath the tables and before the calculations as text. To write anything in excel as text, you have to include quotations before and after the entry. For example, “Homework 1” as opposed to simply typing Homework 1, which will give you an error. Also, write down the equation to calculate the NDHI in the same manner. A division sign of “/” is acceptable, you can’t input the fraction division sign in excel.
2. For each formula you calculated under step 3, I need you to do the following:
1. Click at a given cell and press: Ctrl + ` for Windows and Command + ` for Mac. The key ( ` ) is in the upper left corner of most keyboards. Do you see that now, instead of displaying a final number, the cell shows the formula?
2. For each calculation, I want you to have two cells. One Cell showing the formula and another showing the final result.
• Use sub-titles and formatting to make this look organized. You might want to insert “ = “ to make things look as organized as possible
1. YOU NEED TO PRINT YOUR RESULTS AS PDF. Once you do all the above, you need to print your excel sheet as PDF. Refer back to the printing videos on the Excel Sheet to learn how to do that. To print as PDF, go to the printer name after you click print and change it to PDF. Are you able to see that? ALL YOUR WORK SHOULD LOOK NEAT AND FIT ON ONE PAGE ONLY. HOMEWORK NOT PRINTED ACCORDINGLY WILL BE PENALIZED.

Your final product will have the following components that will be graded as follows:

1. Formatted Tables inputted from Text and formulas inputted as text with subtitles for all calculations (5 pts)
2. Cells containing the calculated formula (5 pts)
3. Cells containing the solution for each formula (5pts)
4. Document does not exceed one page and well organized as PDF (5 pts)

### Response Sheet for Week 1

Summary of Week: Presentations, textbook readings and external readings for week one are meant to clarify what is the general definition of economic development and introduce the measure of New Human Development Index (NHDI). The measure is used to classify countries in-terms of their development. Answering questions for each required reading listed below will help you understand important concepts that you will be tested on for the midterms.

#### Introduction: What is Development?

Textbook Reading (Todaro and Smith): Section 1.3-1.5 (pages 16 to 29): This reading is very important to introduce a definition of economic development. It will help clarify and provide more information on some of the questions from the first presentation as well.

• What is traditional economics? What is it concerned with?
• Summarize the new economic view of development
• What is Amartya Sen’s Approach? Summarize but hitting as many points as possible
• What is the relationship between development and happiness? Be more precise. Also, comment on figure 1.2 in that section.Hint:It seems that income is important for happiness. The book explains that in detail. However, we will see from later studies mentioned in the power-point presentation that after a certain level of income, happiness does seem to decrease.
• What are core values of development? Spend a paragraph on each goal.
• What are the three Objectives of Development? How are the objectives different than the core values?
• Read Table 1.1. Don’t memorize things in it but know what are these millennium goals are about. For your information , millennium goals are outdated. Google Sustainable Development Goals for your own information (I won’t test you on those).
• Read section 1.4. Summarize it hitting the main ideas. Don’t worry about the details. Read the Conclusion in section 1.5

• What is the goal of economic development?
• What are factors determining quality of life?
• What is the relationship between Income and happiness? How does this differ from the book’s point of view (if any).Hint: The graph on slide 7, shows that happiness does increase with countries of higher GDP. However, after a certain level of income, it seems that happiness seems to decrease.
• What are the Millennium development goals? Explain each one briefly.

##### New Human Development Index: How to classify countries in-terms of development?

Textbook Reading (Todaro and Smith): Section 2.2-2.3 (pages 45 to 55):What are factors of development and how to measure them.

• What are the three factors of development examined here? Explain each briefly
• Look at the map in figure 2.1. List 3 countries under each one of the five categories of income. Look at map key.
• Why is the purchasing power parity used?
• What is the NHDI?
• Read Pages 51 to 54 carefully and write down all the equations you need to calculate the NHDI. There is a typo in Box 2.1 and so don’t worry about solving yet. You will in the following section. For the formulas, you can take a picture of your work and paste it here (Don’t overdo it).

External Reading: Technical Notes to Calculate the NHDI.
http://hdr.undp.org/sites/default/files/hdr_2013_en_technotes.pdf

This source will help you understand the process of calculating the NHDI. After answering these questions, you should be expected to calculate the NHDI on the homework or the midterm.

• Go to page 2. Read it very carefully and solve this problem. Go back and forth between that and the book when things are not clear. Re-do the example and attach it here as a picture (Don’t attach more than one pic. Just prove that you did it). This is a mathematical calculation that you are responsible for.

External Reading: Human Development Report 2016.
http://www.hdr.undp.org/sites/default/files/2016_human_development_report.pdf

Don’t read this report. Only focus on the questions.

• Read Forward of the Report. Summarize it (Report’s Forward is at about page 4).
• Glance generally at the report, in a sentence or so, how does it relate to our discussion about the NHDI?
• Go to the Human Development Index Trend on Page 198. What is this table about? List 2 or 3 countries under each category from the table such as “High Human Development”

Textbook Reading (Todaro and Smith): Page 56:

• Summarize each bullet point
• What are criticisms of the NHDI?

###### Human Development Index (Power Point Presentation):
• Starting from Slide 7 to 12. Please write down what each graph shows and what are possible implications. This is important. Refer to the Human Development report, where most of the graphs come from, if some are not clear.
• I mention other criticisms on the last two slides. Understand how those make sense given the formula to calculate the NHDI as you did in the exercise before.

## The Developing World

Textbook Reading (Todaro and Smith): Section 2.4 (pages 55 to 73):

• Summarize, with sufficient detail, each one of the characteristics of the developing world mentioned in the chapter.
• Don’t spend much time on details like the various graphs. Skip the “Boxes”

Textbook Reading (Todaro and Smith): Case Study 2 (pages 96 to 101):

• You won’t be tested on this but it is very important for the homework, and so, read it very carefully. Your homework will mimic this study but with two countries you choose from the report! Details are in the homework instructions in separate document (This is not a question).

Homework 3

Read Carefully: Unlike the rest of Excel homework, I want you to submit the excel file ONLY for this homework. If you are stuck after watching tutorials online, go to the Discussion Section on MyCourses and post what you are having difficulty with under the Homework thread. You can email me if that does not help you.

In this homework, you will practice matching. Matching in Excel is very important and will be the building-block for the rest of this class. At the beginning, using VLOOKUPs and INDEX-MATCH can be very frustrating. You are likely to spend a lot of time on this simple homework, but it will be worthwhile. IMPORTANT:doing this homework does not require using VLOOKUPs or INDEX-MATCH. In other words, it is very simple to do by hand. The said final task is NOT the purpose of this exercise, but it is practicing those skills. In following homework, it will be impossible to do any matching by hand.

Before diving into the homework, go to the Weekly Excel Section (sheet). Watch all the links and try to apply them.  You will need to keep referring back to those videos on Youtube and others you find yourself to help you apply the formulas. To solve the homework, do the following:

1. Open the excel sheet attached: Homework 3_Excel0_Week2xcl
2. You will need to match each one of the seven countries with its appropriate region found in Table 2 below.
3. Don’t do the matching by hand. I want you to do the following:
1. In column C, use a VLOOKUP formula to match each country using the country code with its appropriate region (5 pts)
2. Copy Column C and paste Column D as values (paste as values option)(2 pts)
3. In Column E, use the MATCH-INDEX combination you learned from various YouTube videos to do the same. In other words, use MATCH-INDEX to match each country code with the appropriate region. You can use one or two columns to apply the MATCH-INDEX formula. It is completely up to you! (6 pts)
4. Similar to b, paste the result from c as values in the next column (2 pts)

1. Submit your excel file in a format as similar as possible to the original to MyCourses. (You Don’t Need to Print as PDF here)

### Response Sheet for Week 2

Summary of Week: textbook readings and external readings for week twoare meant to define and discuss important characteristics of development. Namely, you will read about topics such as inequality, extreme poverty, health, education and rapid population growth. Each one of these are important determinants of what is a developed system. All of these are also good topics for your final project (will be discussed in -detail towards the end of the course). Answering questions for each required reading listed below will help you understand important concepts that you will be tested on for the midterms.

#### Inequality

Textbook Reading (Todaro and Smith): Beginning of Section 5  (pages 216 to 224). Ignore functional distributions: This reading is very important to introduce the concept of inequality and how it is measured. The concept of a GINI coefficient is important.

• What is a personal distribution of income?
• What are quintiles? Deciles? Can you understand Table 5.1? You should be able to calculate quintiles or quartiles on a midterm for instance.
• What is a Kuznet ratio? You don’t need to calculate it but know what it is, and the general concept.
• What is a Lorenz Curve? I will have you calculate it shortly. For now, don’t worry about calculation but understand the concept very well on pages 220 and 221.
• What is the GINI coefficient? The Concept
• How to calculate the Gini Coefficient. What is the formula? Look at Figure 5.3
• Look at figure 5.4. What is the point of the different curves? What curve demonstrates a more equal economy? Which one does not? Is there a debate?
• What four properties that the Gini coefficient satisfies? Explain each in-detail.

External Reading: What is the GINI Coefficient and how to calculate it? This source will give you more information on what is the GINI coefficient and how to calculate it.  Watch until 31:13 only.

Calculate the GINI Coefficient(Find Guide under Resources in Week 2):This word document will show you step-by-step how to calculate the GINI coefficient given a set of data. Do this after you watch the video because the guide complements it and may be confusing without it. For Homeworkredo the example in the guide and continue it by calculating the GINI coefficient. Submit the homework under Homework 4 in Week 2 on MyCourses. You can leave this empty here since this is a homework submission.

Textbook Reading (Todaro and Smith): Section 5.3  (pages 230 to 232).  Why is inequality bad in an economy:

• What are the three main reasons of why inequality is bad? I won’t have you work with an equation like on page 232, but you should understand what it means.

#### Absolute Poverty

Textbook Reading (Todaro and Smith): Section 5.2 (pages 226 to 230):What  is absolute poverty and how to measure it. Applying the Formulas is very important here.

• What is absolute poverty? How is it different than just poverty?
• What is a headcount Index? Why is it not sufficient and we need other measures?
• Comment on figure 5.6
• What is the total poverty gap (TGP) measure as a concept? How do we see its advantages from figure 5.6.
• Important: You are expected to be able to calculate the TGP.You should be able to apply this formula to an application!The big sigma is called a “summation sign”. This link will help you understand the summation: http://www.columbia.edu/itc/sipa/math/summation.html
• What is the AGP? Calculate it.
• What is the Foster-Greer Thorbecke Index? Why is it kind of a generalization of the TGP? What is its advantages over the TGP?
• Equation (5.3) is extremely important. Make sure you can solve the application of P2 on page 229. Don’t worry about equation (5.4).
• Again, now that you have been able to solve the numerical example on page 229. Can you easily solve a problem using equation (5.1)? Try it out!
• What is the P2 measure? Why is it useful?
• What is the P1 measure?
• Why do development agencies still use the P0 measure?
• Briefly describe the Multidimensional Poverty Measurement.

Textbook Reading (Todaro and Smith): Section 5.4 (pages 240 to 256): What is  the magnitude and extent of absolute poverty.

• How many people in the World live under the poverty line? What percentage of the world’s population? Is that a lot?
• Comment on Figure 5.13. Which world continent has had the most progress in reducing absolute poverty?
• Is absolute poverty similar in magnitude in different continents?
• What is Table 5.5? What measure is it using? Choose one country and talk about it using the table.
• What is the MPI? Don’t worry about calculating it.
• What is Chronic Poverty? Summarize the paragraph
• What is the relationship between economic growth and poverty? Summarize briefly
• Summarize the following concepts (a paraph is sufficient):
• Rural Poverty
• Women and Poverty

##### Education and Health

Textbook Reading (Todaro and Smith): Selected readings from Chapter 8:Education and Health are important determinants of development. In this section, you will read selected pages from the chapter that will provide you with a general idea of key information with regards to Education and Health.

Read section 8.1 (Pages 382 – 388):

• Why to study Health and Education? Relate to the general idea of development
• Why is education and health are closely related?
• Why increasing income alone is not enough to boost education and health?

Read section 8.3 (Pages 391 – 396):

• What is Child Labor?
• According to the International Labor Organization (ILO), what is the state of child labor at the time of writing the chapter?
• What is figure 8.3? Use the description in the book to help you understand the general idea. I will not have you re-create the graph, but understand what is happening.
• What are conditional-cash transfers?
• After reading, is child labor an issue? Is it good or bad for development? Why? What are strategies to get more children enrolled in schools. Summarize in a paragraph or two.

Read section 8.4 (pages 396 – 400):

• What is the educational gender gap?
• Check figure 8.4, is it an issue in all developing nations?
• Why is it important to close the educational gap? Three reasons. Explain.
• Is there discrimination against women in healthcare? List all such instances and briefly explain them.
• What are consequences of gender bias in health and education? Summarize pages 399 – 400.

Distribution of Education (pages 404 – 406):

• Examine Figure 8.7? Explain the graph
• The book compares South Korea to India. What is the objective of this comparison?
• What is a more-equal distribution of education? Is that good or bad to improving the educational system and therefore development?
• Comment on school quality in some developing nations?
• Summarize: according to these few pages, what are problems in educational systems in developing countries and how can they be improved? One small paragraph is sufficient.

Section 8.6  (pages 406 – 419):Please read all those pages listed. Do NOT read any of the Boxes within the assigned reading. Ignore those completely.

• After having read the section, please list all wide-spread diseases and health issues that appear in many developing countries and how some can be countered. Write one small paragraph for each disease. In a way, you are summarizing the 13 or so pages you just read.

##### High Population Growth

Textbook Reading (Todaro and Smith): Section 6.1 (Pages 284 to 293):  This section introduces population growth, and its relationship with economic development.

• What is the population growth at the time that the chapter was written? What is it now? Is the population of the World growing rapidly?
• In historical context, how is development now different than what it was in the past?
• Geographically speaking, where is most of the world’s population? Be detailed here using figure 6.2
• Summarize the section about fertility and mortality trends. How do developing nations differ than those who are developed?
• Are people more youthful in developing nations?
• What are the two reasons for the momentum of population growth? Discuss those in some detail.

Textbook Reading (Todaro and Smith): Section 6.5 (Pages 307 to 315):  This section talks about high fertility and whether it is a real problem or not for economic growth.

• What are the three arguments of why population growth is not a real problem? In one paragraph for each reason, describe what are the reasons why it is not viewed as a real problem.
• What is the “extremist argument” on population growth?
• What is the population-poverty cycle? Is it adopted by most economists today?
• The simple model on page 312 is meant to capture the effect of population growth on economic growth. Don’t go in-detail when it comes to the math, but understand the general idea by reading carefully.
• Briefly talk about all 7 other reasons of why population growth is seen as a real
• Briefly summarize the consensus between the two schools of thoughts regarding population growth

Last Updated on February 11, 2019 by EssayPro