HUMAN DEVELOPMENT INDEX (HDI)

What is the human development index (HDI)? The HDIhuman development indexis a summary composite index that measures a country's average achievements in three basic aspects of human development: longevity, knowledge, and a decent standard of living. Longevity is measured by life expectancy at birth; knowledge is measured by a combination of the adult literacy rate and the combined primary, secondary, and tertiary gross enrolment ratio; and standard of living by GDP per capita (PPP US$). For details on how to calculate the HDI, see pages 3401 Technical Note 1. The Human Development Index (commonly abbreviated HDI) is a summary of human development around the world and implies whether a country is developed, still developing, or underdeveloped based on factors such as life expectancy, education, literacy, gross domestic product per capita. The results of the HDI are published in the Human Development Report, which is commissioned by the United Nations Development Program (UNDP) and is written by scholars, those who study world development and members of the Human Development Report Office of the UNDP. According to the UNDP, human development is about creating an environment in which people can develop their full potential and lead productive, creative lives in accord with their needs and interests. People are the real wealth of nations. Development is thus about expanding the choices people have to lead lives that they value. Human Development Index Background The United Nations has calculated the HDI for its member states since 1975. The first Human Development Report was published in 1990 with leadership from Pakistani economist and finance minister Mahbub ul Haq and Indian Nobel Prize Laureate for Economics, Amartya Sen. The main motivation for the Human Development Report itself was a focus on only real income per capita as the basis for a countrys development and prosperity. The UNDP claimed that economic prosperity as shown with real income per capita, was not the only factor in measuring human development because these numbers do not necessarily mean a countrys people as a whole are better off. Thus, the first Human Development Report used the HDI and examined such concepts as health and life expectancy, education, and work and leisure time.

The Human Development Index Today Today, the HDI examines three basic dimensions to measure a countrys growth and achievements in human development. The first of these is health for the countrys people. This is measured by life expectancy at birth and those with higher life expectancies rank higher than those with lower life expectancies. The second dimension measured in the HDI is a countrys overall knowledge level as measured by the adult literacy rate combined with the gross enrollment ratios of students in primary school through the university level. The third and final dimension in the HDI is a countrys standard of living. Those with higher standards of living rank higher than those with lower standards of living. This dimension is measured with the gross domestic product per capita in purchasing power parity terms, based on United States dollars. In order to accurately calculate each of these dimensions for the HDI, a separate index is calculated for each of them based on the raw data gathered during studies. The raw data is then put into a formula with minimum and maximum values to create an index. The HDI for each country is then calculated as an average of the three indices which include the life expectancy index, the gross enrollment index and the gross domestic product. 2011 Human Development Report On November 2, 2011, the UNDP released the 2011 Human Development report. The top countries in the Human Development Index portion of the report were grouped into a category called Very High Human Development and are considered developed. The top five countries based on 2011 HDI were: 1) Norway 2) Australia 3) Netherlands 4) United States 5) New Zealand The category of Very High Human Development" includes places like Bahrain, Israel, Estonia and Poland. Countries with High Human Development are next and include Armenia, the Ukraine and Azerbaijan. There is a category called "Medium Human Development" which includes Jordan, Honduras, and South Africa. Finally, countries with Low Human Development include such places as Togo, Malawi and Benin.

Criticisms of the Human Development Index Throughout its time in use, the HDI has been criticized for a number of reasons. One of them is its, failure to include ecological considerations while focusing online on national performance and ranking. Critics also say that the HDI fails to recognize countries from a global perspective and instead examines each independently. In addition, critics have also said that the HDI is redundant because it measures aspects of development that have already been highly studied worldwide. Despite these criticisms, the HDI continues to be used today and is important because it consistently draws the attention of governments, corporations and international organizations to portions of development which focus on aspects other than income like health and education.

Human development index: a critique. Abstract : This discussion focuses on the advantages and disadvantages of constructing a summary measure of the multidimensional and dynamic concept of development. 2 indexes are referred to: the UN Development Programme; human development index (HDI) and the Physical Quality of Life Index (PQLI). PQLI weights equally life expectancy at 1 year, infant mortality, and literacy, regardless of the correlation of variables and the arbitrariness of the weights. PQLI also is assumed to measure the quantity of life, not the quality. HDI measures quantity and quality and includes life expectancy, literacy, and real GDP/capita, and may include a measure of human freedom. Objectivity is a major problem with any index. Assignment of weights is an example of arbitrariness without justification and the index is sensitive the weights assigned. There is a paradox between defending weights on the 1 hand and, if robustness of the index is assumed and components are correlated, then any single component could suffice. A more serious criticism of the HDI is the weighting of each rank order of the country by 1/3 and summing the weighted ranking of the 3 indicators. The flaw here is the problem of application of ratio scales on ordinal magnitudes. The rank correlation coefficient between real GDP/capita and life expectancy, real GDP/capita and literacy; and literacy and life expectancy are .90, .80, and .89, respectively. HDI is also correlated with GDP/capita (.87). Composite indexes are not sensitive to variability in components or the imbalance in components, e.g., a country with low means but high literacy. The goal should continue to be to develop a conceptually and methodologically acceptable summary measure. It is suggested that a necessary component is economic development. Countries may be ranked according to their level of economic development in order to measure their achievements in human development. A weighted distribution of income/capita is a better indicator of the economic well being of a country because it reflects the maldistribution of income. Access to available government goods and services by income groups should also be taken into account. Purchasing power parity should replace income/capita in nominal prices for international comparisons due to the presence of nontradable goods and services and distortions from exchange rate anomalies, tariffs, and taxes. Thus, a replacement for HDI is purchasing power parity adjusted real income/capita weighted by the distribution of income which uses the Gini Coefficients. The Human Development Index (HDI) is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries. The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education and standards of living for countries worldwide. It is a standard means of measuring well-being, especially child welfare. It is used to distinguish whether the country is a developed, a developing or an under-developed country, and also to measure the impact of economic policies on quality of life. There are also HDI for states, cities, villages, etc. by local organizations or companies.

The Human Development Index ranks the countries of the world in terms of its human development. The Human Development Index implies whether a country is developed, developing or underdeveloped. The Human Development Index sets a standard means of measuring human development and sets levels of options of person for personal achievement. The Human Development Index is published by the United Nations Development Programme and is the centerpiece of the UNs Human Development Report. The Human Development Index was created as an alternative to the common practice to rank human development solely on a countrys gross domestic product. First published in 1990 under Pakistani economist Mahbub ul Haq and Indian Nobel Laureate Amartya Sen, the goal of the Human Development Report and the Human Development Index was to accurately measure whether people are better off in terms of health, freedom, education and other aspects of life not measured by gross GDP. The originators stated: People are the real wealth of a nation. The basic objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives. This may appear to be a simple truth. But it is often forgotten in the immediate concern with the accumulation of commodities and financial wealth. The HDI looks at different factors including health and education to rank the most developed nations. The Formula In order to rank whether a certain country is developed, developing, or underdeveloped, the Human Development Index looks at a number of different factors. The Index measures life expetency, literacy, education, and GDP for countriers worldwide. These variables are then put into a mathematical algoryth which measures the potentioal and real developmenet of any given nation. Iceland Was Considered The Most Developed Country In 2008. The 2008 Report - The last time the report of the Human Development Index were released in 2009, Iceland, Norway and Canada were considered the three most developed countries in the world. The United States was seen to be the 15th most developed nation, falling three places since the last time the study was conducted. Sierra Lione was considered the least developed nation of the 178 studied. Many nations do not cooperate with the study and are therefore not listed. Many Believe The HDI Does Not Provide A Complete Picture Of A Country's Development Criticisms The Human Development Index is highly criticized. Many criticize the failure of the index to include any ecological considerations and have lost touch with its original purpose. It is highly criticized for being redundant and adding very little to the development of countries. Other criticisms include that the Human Development Index does not look at enough factors to truly gage the level of happiness an individual feels in a certain country. Critics claim to measure true happiness the formula must include physical, biological,

mental, emotional, social, educational, economic, and cultural components. However, the Human Development Index only looks at life expectancy, adult literacy and education. It leaves our much of the cultural components that make up a society.