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The human development index is a statistic tool used by scientists from different disciplines to describe a given population’s quality of life. It mainly concentrates on various demographic characteristics although much emphasis is given to education, life expectancy, and income (Cleveland & Douglas, 2013).
The Human Development Index (HDI) is used internationally to rank countries into four categories based on the above-mentioned aspects. It is important to note that the origin and development of the human development index is closely linked to the United Nations, to be more precise, to the United Nations Development Program’s annual development reports (Cleveland & Douglas, 2013).
History of the human development Index
As mentioned earlier, the Human Development Index traces its origin to the United Nations Development Program reports. Mahbub ul Haq, a Pakistani economist is credited as the main architect behind the development of the HDI (Stanton, 2007, p. 1). Mahbub together with other economists sought to shift human development indices from national income to a more “people-oriented” approach that captured the real situation as far as human development is concerned (Cleveland & Douglas, 2013).
Apparently, the national income approach grossly underestimated or overestimated the quality of life that people within a given region led. Thus, the need for a more accurate method to indicate the quality of human life gave rise to the Human Development Index in 1990.
Dimensions of the Human Development Index
In a nutshell, the Human Development Index measures the quality of life of a given group of people, mainly in countries or regions with recognized political autonomy.
Precisely, the HDI seeks to investigate and establish the quality of life which is measured through the life expectancy rate (UNDP, 2013). Life expectancy at birth is the number of years a person is expected to live in a particular country with special consideration given to the quality of life. It also takes into account the mortality rate of the people concerned.
Besides life expectancy, another important aspect of HDI is the education index that seeks to measure the quality of education available to people in a particular country. This dimension takes into account the years of schooling and the expected number of years that the inhabitants are expected to have access to education (UNDP, 2013). The education index is shaped by such factors as access to basic primary school education by all demographic groups which crucially determines literacy levels.
HDI also measures the gross national income per capita that is mainly done in USD. Per capita income which sometimes can be given in purchasing power parity figures is the income per person in a given territory (UNDP, 2013). It usually indicates the production potential and contribution to the GDP of every individual in a given economy. Many times economists use per capita income as an indicator of a country’s standard of living.
Calculation of HDI
Calculation of HDI has slightly changed over the years especially due to the dynamics of human life and economic development. The old calculation method that was used in the UNDP reports up to the year 2011 used three indices, i.e. life expectancy, knowledge and education and standard of living (UNHDR, 2004). In the new method of calculation however, HDI is calculated using the three indices with minor changes.
In the new method, the life expectancy index remains the same while the education index does not give a lot of weight to knowledge. It is important however to note that knowledge is considered to be crucial in the new method as indicated by one’s level of education. In the standard of living index, the new method notably uses gross national income instead of gross domestic product (Cleveland & Douglas, 2013).
HDI and Per Capita
It is important to note that HDI and GDP are two different terms with different meanings although they come in handy when describing human development in any setting.
GDP is used to describe the total sum of all economic activities in a country. GDP indicates the economic wellbeing of a nation (UNDP, 2013). Essentially, any effect on GDP has a ripple effect on the entire economy and can easily affect the HDI.
Given its nature, HDI is more or less an all round measuring indicator that considers many aspects including GDP to describe human development levels (UNDP, 2013).
Weaknesses of HDI
The human development index is widely used in gauging the level of development of a population. However, it does not mean that the method is perfect and has no flaws. For instance, HDI does not take into account other important factors such as gender equality and development (Cleveland & Douglas, 2013).
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Additionally, HDI relies entirely on statistics that are supplied by different national bureaus. Given the long chain that this data follows, it is likely that some of the statistics that UNDP uses to calculate HDI are not accurate, hence resulting into an unrealistic picture.
Cleveland, C & Douglas, G. (2013). Human Development Index. Washington, D.C.: Environmental Information Coalition, National Council for Science and the Environment). Retrieved from https://editors.eol.org/eoearth/wiki/Main_Page
United Nations Development Program, (2013). Human Development Index (HDI). UNDP. Retrieved from http://hdr.undp.org/en/content/human-development-index-hdi
UN Human Development Report, (2004). Human Development Index – Countries with low human development. UN. Retrieved from https://www.nationsonline.org/oneworld/human_development_low.htm