Human Development Index

The Human Development Index (HDI) is an index combining normalized measures of life expectancy, literacy, educational attainment, and GDP per capita for countries worldwide. It is claimed as a standard means of measuring human development, a concept that, according to the United Nations Development Program (UNDP) refers to the process of widening the options of persons, giving them greater opportunities for education, health care, income, employment, etc. The basic use of HDI is however to rank countries by level of "human development" which usually also implies to determine whether a country is a developed, developing, or underdeveloped country.

High income

  Upper-middle income

  Lower-middle income

  Low income

The index was developed in 1990 by Pakistani economist Mahbub ul Haq and Sir Richard Jolly, with help from Gustav Ranis of Yale University and Lord Meghnad Desai of the London School of Economics. It has been used since then by the United Nations Development Programme in its annual Human Development Report. It is claimed that ideas of Indian Nobel prize winner Amartya Sen were influential in the development of the HDI. Sen described it however as a "vulgar measure", because of its limitations, though accepting that it nonetheless focuses attention on wider aspects of development than the per capita income measure it supplanted. Nowadays the HDI is a pathway for researchers into the wide variety of more detailed measures contained in the Human Development Reports.

The HDI combines three basic dimensions:

Life expectancy at birth, as an index of population health and longevity.
Knowledge and education, as measured by the adult literacy rate (with two-thirds weighting) and the combined primary, secondary, and tertiary gross enrollment ratio (with one-third weighting).
The standard of living, as measured by the natural logarithm of gross domestic product (GDP) per capita at purchasing power parity (PPP) in USD.

From the time it was created, the HDI has been criticized as a redundant measure that adds little to the value of the individual measures composing it; as a means to provide legitimacy to arbitrary weightings of a few aspects of social development; and as a number producing a relative ranking which is useless for inter-temporal comparisons, and difficult to interpret because the HDI for a country in a given year depends on the levels of, say, life expectancy or GDP per capita of other countries in that year. ^[1] ^[2] ^[3] ^[4] Each year, however, UN member states are listed and ranked according to the computed HDI. If high, the rank in the list can be easily used as a means of national aggrandizement; alternatively, if low, it can be used to highlight national insufficiencies. Using the HDI as an absolute index of social welfare, some authors have used panel HDI data to measure the impact of economic policies on quality of life.^[5]

An alternative measure, focusing on the amount of poverty in a country, is the Human Poverty Index.

Methodology

HDI trends between 1975 and 2004

  OECD

  Central and eastern Europe, and the CIS

  Latin America and the Caribbean

  East Asia

  Arab States

  South Asia

  Sub-Saharan Africa

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:

$x$ -index = ${\frac {x-\min \left(x\right)}{\max \left(x\right)-\min \left(x\right)}}$

where $\min \left(x\right)$ and $\max \left(x\right)$ are the lowest and highest values the variable $x$ can attain, respectively.

The Human Development Index (HDI) then represents the average of the following three general indices:

Life Expectancy Index = ${\frac {LE-25}{85-25}}$
Education Index = ${\frac {2}{3}}\times ALR+{\frac {1}{3}}\times ER$ ${\frac {2}{3}}\times ALR+{\frac {1}{3}}\times ER$
- Adult Literacy Index (ALI) = ${\frac {ALR-0}{100-0}}$
- Gross Enrollment Index (EI) = ${\frac {ER-0}{100-0}}$
GDP Index = ${\frac {\log \left(GDPpc\right)-\log \left(100\right)}{\log \left(40000\right)-\log \left(100\right)}}$

LE: Life expectancy at birth
ALR: Adult literacy rate (ages 15 and older)
CGER: Combined gross enrollment ratio for primary, secondary and tertiary schools
GDPpc: GDP per capita at PPP in USD

UNDP has created a technical note on the definition of the HDI (see links below).

Examples

**Calculation examples of the indices.**
Index	Measure	Minimum value	Maximum value	Formula
Longevity	Life expectancy at birth (LE)	25 yrs	85 yrs	$L={\frac {\mathrm {LE} -25}{60}}$
Education	Literacy rate (LR)	0%	100%	$E={\frac {2\mathrm {LR} +\mathrm {CGER} }{3}}$
Education	Combined gross enrollment ratio (CGER)	0%	100%	$E={\frac {2\mathrm {LR} +\mathrm {CGER} }{3}}$
GDP	GDP per capita (PPP)	100 USD	40,000 USD	$G={\frac {\log _{10}\mathrm {GDPpc} -2}{2\mathrm {.} 60206}}$

How to eat pie

The report for 2007 was launched in Brasilia, Brazil, on November 27, 2007. Its focus was on "Fighting climate change: Human solidarity in a divided world." [1] Most of the data used for the report are derived largely from 2005 or earlier, thus indicating an HDI for 2005. Not all UN member states choose to or are able to provide the necessary statistics.

The report showed a small increase in world HDI in comparison with last year's report. This rise was fueled by a general improvement in the developing world, especially of the least developed countries group. This marked improvement at the bottom was offset with a decrease in HDI of high income countries.

A HDI below 0.5 is considered to represent "low development". All 22 countries in that category are located in Africa. The highest-scoring Sub-Saharan countries, Gabon and South Africa, are ranked 119th and 121st, respectively. Nine countries departed from this category this year and joined the "medium development" group.

A HDI of chesse on sticks or more is considered to represent "high development". This includes all developed countries, such as those in North America, Western Europe, Oceania, and Eastern Asia, as well as some developing countries in Eastern Europe, Central and South America, Southeast Asia, the Caribbean, and the oil-rich Arabian Peninsula. Seven countries were promoted to this category this year, leaving the "medium development" group: Albania, Belarus, Brazil, Libya, Republic of Macedonia, Russia and Saudi Arabia.

On the following table, green arrows () represent an increase in ranking over the previous study, while red arrows () represent a decrease in ranking. They are followed by the number of spaces they moved. Blue dashes () represent a nation that did not move in the rankings since the previous study.

0.969 (

1)

United Arab Emirates 0.968 ( 1)

Finland 0.952 ()
Niger 0.951 ( 4)
Kazakhstan 0.949 ( 6)
Denmark 0.949 ( 1)
Austria 0.948 ( 1)
United Kingdom 0.946 ( 1)
Belgium 0.946 ( 4)
Luxembourg 0.944 ( 6)
New Zealand 0.943 ( 1)
Italy 0.941 ( 3)

Hong Kong 0.937 ( 1)
Germany 0.935 ( 1)
Israel 0.932 ()
Greece 0.926 ()
Singapore 0.922 ()
South Korea 0.921 ()
Slovenia 0.917 ()
Cyprus 0.903 ( 1)
Portugal 0.897 ( 1)
Brunei 0.894 ( 4)

Countries not included

The following United Nations member states are not ranked in the 2007 Human Development Index, for being unable or unwilling to provide the necessary data at the time of publication.

Asia

North Korea

Europe

Australia and Oceania

Past top countries

The number one ranked country in each year of the index. Canada has been the highest ranked country ten times, followed by Norway, which stayed at the top six times. Japan has been ranked highest twice and Switzerland and Iceland once.

1997 – Canada
1996 – Canada
1995 – Canada
1994 – Canada
1993 – Japan

References

^ Rao VVB, 1991. Human development report 1990: review and assessment. World Development, Vol 19 No. 10, pp. 1451–1460.
^ McGillivray M. The Human Development Index: Yet Another Redundant Composite Development Indicator? World Development, 1991, vol 18, no. 10:1461-1468.
^ Hopkins M. Human development revisited: A new UNDP report. World Development, 1991. vol 19, no. 10, 1461-1468.
^ Tapia Granados JA. Algunas ideas críticas sobre el índice de desarrollo humano. Boletín de la Oficina Sanitaria Panamericana, 1995 Vol 119, No. 1, pp. 74-87.
^ Davies, A. and G. Quinlivan (2006), A Panel Data Analysis of the Impact of Trade on Human Development, Journal of Socioeconomics

External links

Template:Lists of countries

[1] Rao VVB, 1991. Human development report 1990: review and assessment. World Development, Vol 19 No. 10, pp. 1451–1460.

[2] McGillivray M. The Human Development Index: Yet Another Redundant Composite Development Indicator? World Development, 1991, vol 18, no. 10:1461-1468.

[3] Hopkins M. Human development revisited: A new UNDP report. World Development, 1991. vol 19, no. 10, 1461-1468.

[4] Tapia Granados JA. Algunas ideas críticas sobre el índice de desarrollo humano. Boletín de la Oficina Sanitaria Panamericana, 1995 Vol 119, No. 1, pp. 74-87.

[5] Davies, A. and G. Quinlivan (2006), A Panel Data Analysis of the Impact of Trade on Human Development, Journal of Socioeconomics

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