Human Development Index Explained

The Human Development Index (HDI) is a statistical composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, which is used to rank countries into four tiers of human development. A country scores a higher level of HDI when the lifespan is higher, the education level is higher, and the gross national income GNI (PPP) per capita is higher. It was developed by Pakistani economist Mahbub ul-Haq and was further used to measure a country's development by the United Nations Development Programme (UNDP)'s Human Development Report Office.[1] [2] [3] [4]

The 2010 Human Development Report introduced an Inequality-adjusted Human Development Index (IHDI). While the simple HDI remains useful, it stated that "the IHDI is the actual level of human development (accounting for this inequality), while the HDI can be viewed as an index of 'potential' human development (or the maximum level of HDI) that could be achieved if there was no inequality."[5]

The index is based on the human development approach, developed by Mahbub ul-Haq, anchored in Amartya Sen's work on human capabilities, and often framed in terms of whether people are able to "be" and "do" desirable things in life. Examples include — being: well fed, sheltered, and healthy; doing: work, education, voting, participating in community life. The freedom of choice is considered central — someone choosing to be hungry (e.g. when fasting for religious reasons) is considered different from someone who is hungry because they cannot afford to buy food, or because the country is going through a famine.[6]

The index does not take into account several factors, such as the net wealth per capita or the relative quality of goods in a country. This situation tends to lower the ranking of some of the most developed countries, such as the G7 members and others.[7]

Origins

The origins of the HDI are found in the annual Human Development Reports produced by the Human Development Report Office of the United Nations Development Programme (UNDP). These annual reports were devised and launched by Pakistani economist Mahbub ul-Haq in 1990, and had the explicit purpose "to shift the focus of development economics from national income accounting to people-centered policies". He believed that a simple composite measure of human development was needed to convince the public, academics and politicians that they can, and should, evaluate development not only by economic advances but also improvements in human well-being.

Dimensions and calculation

New method (2010 HDI onwards)

Published on 4 November 2010 (and updated on 10 June 2011), the 2010 Human Development Report calculated the HDI combining three dimensions:[8] [9]

In its 2010 Human Development Report, the UNDP began using a new method of calculating the HDI. The following three indices are used:

1. Life Expectancy Index (LEI)

=

rm{LE
-

20}{85-20}

=

rm{LE
-

20}{65}

LEI is equal to 1 when life expectancy at birth is 85 years, and 0 when life expectancy at birth is 20 years.2. Education Index (EI)

=

{rm{MYSI
+

rm{EYSI}}}{2}

[10]

2.1 Mean Years of Schooling Index (MYSI)

=

rm{MYS
}[11]

Fifteen is the projected maximum of this indicator for 2025.

2.2 Expected Years of Schooling Index (EYSI)

=

rm{EYS
}[12]

Eighteen is equivalent to achieving a master's degree in most countries.3. Income Index (II)

=

ln(rm{GNIpc
)

-ln(100)}{ln(75,000)-ln(100)}

=

ln(rm{GNIpc
)

-ln(100)}{ln(750)}

II is 1 when GNI per capita is $75,000 and 0 when GNI per capita is $100.Finally, the HDI is the geometric mean of the previous three normalized indices:

rm{HDI}=\sqrt[3]{rm{LEI} ⋅ rm{EI}rm{II}}.

LE: Life expectancy at birth
MYS: Mean years of schooling (i.e. years that a person aged 25 or older has spent in formal education)
EYS: Expected years of schooling (i.e. total expected years of schooling for children under 18 years of age, incl. young men and women aged 13–17)
GNIpc: Gross national income at purchasing power parity per capita

Old method (HDI before 2010)

The HDI combined three dimensions last used in its 2009 report:

This methodology was used by the UNDP until their 2011 report.

The formula defining the HDI is promulgated by the United Nations Development Programme (UNDP).[13] In general, to transform a raw variable, say

x

, into a unit-free index between 0 and 1 (which allows different indices to be added together), the following formula is used:

xindex=

x-a
b-a

where

a

and

b

are the lowest and highest values the variable

x

can attain, respectively.

The Human Development Index (HDI) then represents the uniformly weighted sum with contributed by each of the following factor indices:

=

LE-25
85-25

=

LE-25
60
2
3

x ALI+

1
3

x GEI

ALR-0
100-0

=

ALR
100
CGER-0
100-0
=CGER
100

=

log\left(GDPpc\right)-log\left(100\right)
log\left(40000\right)-log\left(100\right)

=

log\left(GDPpc\right)-log\left(100\right)
log\left(400\right)

2022 Human Development Index (2024 report)

See main article: List of countries by Human Development Index.

See also: List of countries by inequality-adjusted Human Development Index. The Human Development Report 2023/24 by the United Nations Development Programme was released on 13 March 2024; the report calculates HDI values based on data collected in 2022.

Ranked from 1 to 69 in the year 2022, the following countries are considered to be of "very high human development":[14]

-RankNation HDI
2022 data (2024 report)Change since 20152022 data (2024 report)Average annual growth (2010–2022)
Switzerland0.967
Norway0.966
Iceland0.959
Hong Kong0.956
Denmark0.952
Sweden
Ireland0.950
Germany
Singapore0.949
Netherlands0.946
Australia
Liechtenstein0.942
Belgium
Finland
United Kingdom0.940
New Zealand0.939
United Arab Emirates0.937
Canada0.935
0.929
20 United States0.927
Luxembourg
Slovenia0.926
Austria
24 Japan0.920
Israel0.915
Malta
Spain0.911
France0.910
Cyprus0.907
Italy0.906
Estonia0.899
0.895
Greece0.893
Bahrain0.888
Andorra0.884
36 Poland0.881
37 Latvia0.879
Lithuania
Croatia0.878
Qatar0.875
Saudi Arabia
42 Portugal0.874
43 San Marino0.867
Chile0.860
Turkey0.855
Slovakia
Hungary0.851
Argentina0.849
Kuwait0.847
Montenegro0.844
Saint Kitts and Nevis0.838
Uruguay0.830
Romania0.827
Antigua and Barbuda0.826
0.823
0.821
Bahamas0.820
Panama
59 Oman0.819
Trinidad and Tobago0.814
Georgia
Barbados0.809
Malaysia0.807
64 Costa Rica0.806
65 Serbia0.805
Thailand0.803
67 Seychelles0.802
Kazakhstan
69 Belarus0.801

Past top countries

The list below displays the top-ranked country from each year of the Human Development Index. Norway has been ranked the highest sixteen times, Canada eight times, and Switzerland, Japan, and Iceland have each ranked twice.

In each original HDI

The year represents the time period from which the statistics for the index were derived. In parentheses is the year when the report was published.

Geographical coverage

The HDI has extended its geographical coverage: David Hastings, of the United Nations Economic and Social Commission for Asia and the Pacific, published a report geographically extending the HDI to 230+ economies, whereas the UNDP HDI for 2009 enumerates 182 economies and coverage for the 2010 HDI dropped to 169 countries.[15] [16]

Country/region specific HDI lists

Criticism

The Human Development Index has been criticized on a number of grounds, including focusing exclusively on national performance and ranking, lack of attention to development from a global perspective, measurement error of the underlying statistics, and on the UNDP's changes in formula which can lead to severe misclassification of "low", "medium", "high" or "very high" human development countries.[17]

There have also been various criticism towards the lack of consideration regarding sustainability[18] (which later got addressed by the planetary pressures-adjusted HDI), and towards social inequality[19] (which got addressed by the inequality-adjusted HDI)

Sources of data error

Economists Hendrik Wolff, Howard Chong and Maximilian Auffhammer discuss the HDI from the perspective of data error in the underlying health, education and income statistics used to construct the HDI. They have identified three sources of data error which are: (i) data updating, (ii) formula revisions and (iii) thresholds to classify a country's development status. They conclude that 11%, 21% and 34% of all countries can be interpreted as currently misclassified in the development bins due to the three sources of data error, respectively. Wolff, Chong and Auffhammer suggest that the United Nations should discontinue the practice of classifying countries into development bins because the cut-off values seem arbitrary, and the classifications can provide incentives for strategic behavior in reporting official statistics, as well as having the potential to misguide politicians, investors, charity donors and the public who use the HDI at large.

In 2010, the UNDP reacted to the criticism by updating the thresholds to classify nations as low, medium, and high human development countries. In a comment to The Economist in early January 2011, the Human Development Report Office responded[20] to an article published in the magazine on 6 January 2011[21] which discusses the Wolff et al. paper. The Human Development Report Office states that they undertook a systematic revision of the methods used for the calculation of the HDI, and that the new methodology directly addresses the critique by Wolff et al. in that it generates a system for continuously updating the human-development categories whenever formula or data revisions take place.

In 2013, Salvatore Monni and Alessandro Spaventa emphasized that in the debate of GDP versus HDI, it is often forgotten that these are both external indicators that prioritize different benchmarks upon which the quantification of societal welfare can be predicated. The larger question is whether it is possible to shift the focus of policy from a battle between competing paradigms to a mechanism for eliciting information on well-being directly from the population.[22]

See also

Indices

Other

External links

Notes and References

  1. A. Stanton. Elizabeth. February 2007. The Human Development Index: A History. ScholarWorks@UMass Amherst . PERI Working Papers. 14–15. 28 February 2019. https://web.archive.org/web/20190228191918/https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1101&context=peri_workingpapers. 28 February 2019. live.
  2. Web site: Human Development Index. Definition of 'Human Development Index' . 29 November 2017. https://web.archive.org/web/20171201030929/https://economictimes.indiatimes.com/definition/human-development-index. 1 December 2017. dead .
  3. Web site: About Human Development . UNDP. 29 July 2011. HDR . https://web.archive.org/web/20120415134936/http://hdr.undp.org/en/humandev/. 15 April 2012. dead.
  4. Web site: Human development index . live . https://web.archive.org/web/20220103061653/https://www.who.int/data/nutrition/nlis/info/human-development-index . 2022-01-03 . 2024-06-26 . World Health Organization.
  5. Web site: Composite indices — HDI and beyond . Human Development Reports . dead . https://web.archive.org/web/20160810022820/http://hdr.undp.org/en/statistics/understanding/indices . 10 August 2016 . 16 January 2021.
  6. Web site: What is Human Development. UNDP. 27 October 2017. February 19, 2015 . HDR . https://web.archive.org/web/20171027132851/http://hdr.undp.org/en/content/what-human-development. 27 October 2017. live. ... human development approach, developed by the economist Mahbub Ul Haq ... .
  7. Book: The Courier. 1994. Commission of the European Communities. en.
  8. Web site: Human Development Report 2010 . 4 November 2010 . UNDP . 15 December 2015 . https://web.archive.org/web/20151222145515/http://hdr.undp.org/en/content/human-development-report-2010 . 22 December 2015 . live . Nations . United .
  9. Web site: Technical notes . 2013 . UNDP . 15 December 2015 . https://web.archive.org/web/20150616130523/http://hdr.undp.org/sites/default/files/hdr_2013_en_technotes.pdf . 16 June 2015 . live .
  10. News: New method of calculation of Human Development Index (HDI). 1 June 2011. India Study Channel. 19 November 2017. en. https://web.archive.org/web/20171110171412/http://www.indiastudychannel.com/resources/141517-New-method-of-calculation-of-Human-Development-Index-HDI.aspx. 10 November 2017. live.
  11. Mean years of schooling (of adults) (years) is a calculation of the average number of years of education received by people ages 25 and older in their lifetime based on education attainment levels of the population converted into years of schooling based on theoretical duration of each level of education attended. Source: Barro . R. J. . Robert Barro . J.-W. . Lee . 2010 . A New Data Set of Educational Attainment in the World, 1950–2010 . NBER Working Paper No. 15902 . Working Paper Series . 10.3386/w15902 . 29 July 2011 . https://web.archive.org/web/20110807191234/http://www.nber.org/papers/w15902 . 7 August 2011 . live . free .
  12. (ESYI is a calculation of the number of years a child is expected to attend school, or university, including the years spent on repetition. It is the sum of the age-specific enrollment ratios for primary, secondary, post-secondary non-tertiary and tertiary education and is calculated assuming the prevailing patterns of age-specific enrollment rates were to stay the same throughout the child's life. Expected years of schooling is capped at 18 years. (Source: UNESCO Institute for Statistics (2010). Correspondence on education indicators. March. Montreal.)
  13. Web site: Definition, Calculator, etc. at UNDP site. https://web.archive.org/web/20071220162154/http://hdr.undp.org/en/statistics/faq/question%2C68%2Cen.html. dead. 20 December 2007. 26 May 2020.
  14. Book: Human Development Report 2023-24: Breaking the gridlock: Reimagining cooperation in a polarized world . 13 March 2024 . United Nations Development Programme . 16 March 2024 .
  15. Web site: Filling Gaps in the Human Development Index . Hastings . David A. . 2009 . United Nations Economic and Social Commission for Asia and the Pacific, Working Paper WP/09/02 . 1 December 2009 . https://web.archive.org/web/20110430104401/http://www.unescap.org/publications/detail.asp?id=1308 . 30 April 2011 . live .
  16. Web site: A "Classic" Human Development Index with 232 Countries . Hastings . David A. . 2011 . HumanSecurityIndex.org . 9 March 2011 . https://web.archive.org/web/20110503210307/http://www.humansecurityindex.org/?page_id=204 . 3 May 2011 . live . Information Note linked to data
  17. Wolff . Hendrik . Chong . Howard . Auffhammer . Maximilian . 2011 . Classification, Detection and Consequences of Data Error: Evidence from the Human Development Index . Economic Journal . 121 . 553 . 843–870 . 10.1111/j.1468-0297.2010.02408.x . 18069132 . 1813/71597 . free . 13 July 2019 . 8 August 2020 . https://web.archive.org/web/20200808041651/https://scholarship.sha.cornell.edu/articles/338/ . live . 0013-0133.
  18. WWF . WWF . Living Planet Report 2014 . . 2014 . 60–62.
  19. Harttgen . Kenneth . Klasen . Stephan . 2012-05-01 . A Household-Based Human Development Index . World Development . 40 . 5 . 878–899 . 10.1016/j.worlddev.2011.09.011 . 0305-750X. 10419/37505 . free .
  20. News: UNDP Human Development Report Office's comments . January 2011 . The Economist . 12 January 2011 . https://web.archive.org/web/20110211083547/http://www.economist.com/user/UNDP%2BHuman%2BDevelopment%2BReport%2BOffice/comments . 11 February 2011 . dead .
  21. News: The Economist (pages 60–61 in the issue of Jan 8, 2011) . 6 January 2011 . 12 January 2011 . https://web.archive.org/web/20110113063006/http://www.economist.com/node/17849159?story_id=17849159 . 13 January 2011 . live .
  22. Monni . Salvatore . Spaventa . Alessandro . 2013 . Beyond Gdp and HDI: Shifting the focus from Paradigms to Politics . Development . 56 . 2 . 227–231 . 10.1057/dev.2013.30 . 84722678 .