Today we will read and learn the theory and concepts of The Human Development Index (HDI).
Learning Outcome
At the end of studying this lesson, the participants will be able to-
Explain the concept of human development index
Calculate human development index
The Human Development Index is a summary of human development. It measures the average achievements in a country in three basic dimensions of human development:
1. A long and healthy life, as measured by life expectancy at birth
2. Knowledge, as measured by the adult literacy rate (with two thirds weight) and the combined primary, secondary and tertiary gross enrolment ration (with one third weight)
3. A decent standard of living, as measured by GDP per capita (PPP US $)
The index was developed in 1990 by Indian Nobel Prize Winner Amartya Sen, Pakistani economist Mahabub ul Haque, with help from Gustav Ranis of Yale University and Lord Meghnad Desai of London School of Economics and has been used since then by United Nations Development Programme (UNDP) in its annual Human Development Report.
The Human Development Report (HDR) was first launched in 1990 with the single goal of putting people back at the center of the development process in terms of economic debate, policy and advocacy.
HUMAN DEVELOPMENT REPORT
Four important human development indices:
The HDI (Human Development Index)
- a summary measure of human development
The GDI (Gender-related Development Index)
- the HDI adjusted for gender inequality
The GEM (Gender Empowerment Measure)
- Measures gender equality in economic and political participation and decision making
The HPI (Human Poverty Index)
- Captures the level of human poverty
Top ten countries
(ranges from 0.968 down to 0.952)
MILLENNIUM DEVELOPMENT GOALS
GOAL 1: ERADICATE EXTREME POVERTY & HUNGER
Bangladesh on MDG
Good progress to
To calculate dimension indices – the life expectancy, education and GDP indices – minimum and maximum values (goal posts) are chosen for each underlying indicator.
Performance in each dimension is expressed as a value between 0 and 1 by applying the following general formula:
Actual Value – Minimum value
Dimension Index = -----------------------------------------
Maximum value – Minimum value
1. Calculating life expectancy
Life expectancy index measure the relative achievement of a country in life expectancy at birth. For Bangladesh, with a life expectancy of 63.3 years in 2004, the life expectancy index is 0.638
63.3 - 25
Life expectancy index = -------------------- = 0.638
85 – 25
2. Calculating the education index
The education index measures a country’s relative achievement in both adult literacy and combined primary, secondary and tertiary gross enrolment. For Bangladesh, with an adult literacy rate of 40.85% in 2004 and combined gross enrolment ratio of 57% in the school year 2004, education index is 0.408
40.85 - 0
Adult literacy rate = --------------------- = 0.408
100 – 0
Gross enrolment index = ------------- = 0.57 100 – 0
Education index = 2/3 (adult literacy index) + 1/3 (gross enrolment index)
= 2/3 (0.408) + 1/3 (0.570)
= 0.462
3. Calculating GDP index
The GDP index is calculated using adjusted GDP per capita (PPP US $) . In the HDI income serves as a surrogate for all the dimensions of human development not reflected in a long and healthy life and in knowledge. Income is adjusted because achieving a respectable level of human development does not require unlimited income. For Bangladesh, with a GDP per capita of 1870 (US $) in 2004, the GDP index is 0.488
Log (1870) – log (100)
GDP index = -------------------------------- = 0.488
Log (40000) – log (100)
4. Calculating the HDI
Once the dimension indices have been calculated, determining the HDI is straightforward. It is a simple average of the three dimension indices.
HDI = 1/3 (life expectancy index) +
1/3 (education index) + 1/3 (GDP index)
= 1/3 (0.638) + 1/3 (0.462) + 1/3 (0.488)
= 0.529
Limitation
The index is not a comprehensive measure of human development. It does not include important indicators such as respect for human right, democracy and inequality. It provides a clear idea for viewing human progress and the complex relationship between income and well-being.
Conclusion
Life expectancy index measure the relative achievement of a country in life expectancy at birth. The education index measures a country’s relative achievement in both adult literacy and combined gross enrolment. The GDP index measure the adjusted GDP per capita (PPP US $). Therefore Human Development Index gives a clear idea for viewing human progress and the complex relationship between income and well-being.
Learning Outcome
At the end of studying this lesson, the participants will be able to-
Explain the concept of human development index
Calculate human development index
- Learning points
- Concept of HDI
- Historical Background
- The Human Development Report 2007/2008
- Key Indicators of Development
- important human development indices
- Top ten countries
- Human Development Profile of SARC Countries
- Millennium Development Goals
- Calculation of HDI
The Human Development Index is a summary of human development. It measures the average achievements in a country in three basic dimensions of human development:
1. A long and healthy life, as measured by life expectancy at birth
2. Knowledge, as measured by the adult literacy rate (with two thirds weight) and the combined primary, secondary and tertiary gross enrolment ration (with one third weight)
3. A decent standard of living, as measured by GDP per capita (PPP US $)
The index was developed in 1990 by Indian Nobel Prize Winner Amartya Sen, Pakistani economist Mahabub ul Haque, with help from Gustav Ranis of Yale University and Lord Meghnad Desai of London School of Economics and has been used since then by United Nations Development Programme (UNDP) in its annual Human Development Report.
The Human Development Report (HDR) was first launched in 1990 with the single goal of putting people back at the center of the development process in terms of economic debate, policy and advocacy.
- Each Report has its own focus drawn from contemporary debate.
- The Human Development Report is an independent report, commissioned by the UNDP, and is the product of a selected team of leading scholars, development practitioners and members of the Human Development Report Office of UNDP. It is translated into numerous languages and launched in more than 140 countries annually.
- The report for 2009 was published by UNDP . Its focus was on “Human Mobility and Development.”
- Most of the data used for the report are derived largely from 2006 or earlier. It covers 177 UN countries out of 192.
- The HDI for Bangladesh is 0.543, which gives the country a rank of 146th out of 177 countries.
- Population-Growth rate, density, age composition
- Population Poverty line
- Gross National Income (GNI)
- Gross Domestic Product (GDP)
- Life Expectancy at Birth
- Public Expenditure on health, education etc
- Adult Literacy Rate
- Gross Enrolment Rate
- Gender Equity
HUMAN DEVELOPMENT REPORT
Four important human development indices:
The HDI (Human Development Index)
- a summary measure of human development
The GDI (Gender-related Development Index)
- the HDI adjusted for gender inequality
The GEM (Gender Empowerment Measure)
- Measures gender equality in economic and political participation and decision making
The HPI (Human Poverty Index)
- Captures the level of human poverty
Top ten countries
(ranges from 0.968 down to 0.952)
- Iceland 0.968
- Norway 0.968
- Australia 0.962
- Canada 0.961
- Ireland 0.959
- Sweden 0.956
- Switzerland 0.955
- Japan 0.953
- Netherlands 0.953
- France 0.952
MILLENNIUM DEVELOPMENT GOALS
GOAL 1: ERADICATE EXTREME POVERTY & HUNGER
Bangladesh on MDG
Good progress to
- Eradicate extreme poverty and hunger,
- Achieve universal primary education,
- Promote gender equality and empower women.
- Reducing child mortality,
- Improving maternal health,
- Eombating HIV/AIDS, malaria and other diseases,
- Ensuring environmental sustainability.
To calculate dimension indices – the life expectancy, education and GDP indices – minimum and maximum values (goal posts) are chosen for each underlying indicator.
Performance in each dimension is expressed as a value between 0 and 1 by applying the following general formula:
Actual Value – Minimum value
Dimension Index = -----------------------------------------
Maximum value – Minimum value
1. Calculating life expectancy
Life expectancy index measure the relative achievement of a country in life expectancy at birth. For Bangladesh, with a life expectancy of 63.3 years in 2004, the life expectancy index is 0.638
63.3 - 25
Life expectancy index = -------------------- = 0.638
85 – 25
2. Calculating the education index
The education index measures a country’s relative achievement in both adult literacy and combined primary, secondary and tertiary gross enrolment. For Bangladesh, with an adult literacy rate of 40.85% in 2004 and combined gross enrolment ratio of 57% in the school year 2004, education index is 0.408
40.85 - 0
Adult literacy rate = --------------------- = 0.408
100 – 0
Gross enrolment index = ------------- = 0.57 100 – 0
Education index = 2/3 (adult literacy index) + 1/3 (gross enrolment index)
= 2/3 (0.408) + 1/3 (0.570)
= 0.462
3. Calculating GDP index
The GDP index is calculated using adjusted GDP per capita (PPP US $) . In the HDI income serves as a surrogate for all the dimensions of human development not reflected in a long and healthy life and in knowledge. Income is adjusted because achieving a respectable level of human development does not require unlimited income. For Bangladesh, with a GDP per capita of 1870 (US $) in 2004, the GDP index is 0.488
Log (1870) – log (100)
GDP index = -------------------------------- = 0.488
Log (40000) – log (100)
4. Calculating the HDI
Once the dimension indices have been calculated, determining the HDI is straightforward. It is a simple average of the three dimension indices.
HDI = 1/3 (life expectancy index) +
1/3 (education index) + 1/3 (GDP index)
= 1/3 (0.638) + 1/3 (0.462) + 1/3 (0.488)
= 0.529
Limitation
The index is not a comprehensive measure of human development. It does not include important indicators such as respect for human right, democracy and inequality. It provides a clear idea for viewing human progress and the complex relationship between income and well-being.
Conclusion
Life expectancy index measure the relative achievement of a country in life expectancy at birth. The education index measures a country’s relative achievement in both adult literacy and combined gross enrolment. The GDP index measure the adjusted GDP per capita (PPP US $). Therefore Human Development Index gives a clear idea for viewing human progress and the complex relationship between income and well-being.
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