When evaluating a country’s level of development, economists and policymakers use different indicators to measure economic performance, quality of life, and overall well-being. Two of the most commonly used indicators are Gross Domestic Product (GDP) and the Human Development Index (HDI). GDP measures the total value of goods and services produced within a country, providing insight into economic growth, while HDI considers life expectancy, education, and income per capita, offering a broader perspective on human well-being. This project challenges students to analyze whether GDP or HDI is a better indicator of development and which measure provides the most accurate representation of a country’s progress.

Students will begin by researching what GDP and HDI measure, understanding their calculation methods and their role in assessing development. They should explore how GDP focuses on economic output but does not account for income inequality, environmental sustainability, or quality of life factors. Meanwhile, HDI provides a more holistic approach, incorporating health, education, and income, but it does not measure economic productivity or business activity as directly as GDP.

A key focus of this project is comparing real-world examples of countries with high GDP but low HDI and vice versa. For example, nations like Qatar and Saudi Arabia have high GDP per capita but lower HDI rankings due to limited access to education or healthcare for certain populations. Conversely, some countries, such as Costa Rica, have moderate GDP levels but high HDI rankings due to strong social services and quality of life improvements.

Another important component is analyzing the strengths and weaknesses of both indicators. Students should evaluate whether economic growth always translates to improved living standards and whether social indicators like literacy rates and life expectancy can fully capture a country’s economic success. They should also consider alternative measures of development, such as the Gini coefficient (which measures income inequality) and the Genuine Progress Indicator (GPI), which adjusts GDP based on environmental and social factors.

The final research paper should assess which measure—GDP or HDI—provides the most accurate representation of development and whether policymakers should prioritize one over the other. The goal of this project is to help students understand the complexity of measuring development and critically evaluate different indicators used to assess progress.