Human Development Index

The Human Development Index (HDI) is a statistical tool used to measure a

country's overall achievement in its social and economic dimensions. The social and
economic dimensions of a country are based on the life expectancy of the people,
their level of education attainment and their standard of living(based on their GNI
per capita). A nation with longer lifespans, greater levels of education, and higher gross
national income (GNI) per capita all have higher HDI scores.
The HDI is calculated using the following indicators:
1. Life Expectancy: This indicator of health is used to measure the overall
well-being of individuals in a country. It is the average number of years a newborn is
expected to live, assuming that current mortality rates remain constant throughout their
lifetime.
2. Education Attainment: This is measured using the mean years of schooling
for adults aged 25 years and more and expected years of schooling for children of
school entering age. The mean years of schooling is weighted one-third while expected
years of schooling is weighted two-thirds.
3. Standard of Living: This is measured by Gross National Income (GNI) per
capita expressed in terms of Purchasing Power Parity (PPP), a common metric used to
reflect average income.
These three dimensions are then aggregated into a composite index using
geometric mean. The HDI ranges between 0 and 1, with 1 being the highest human
development and 0 being the lowest.
The UNDP introduced a new formula for the HDI in its 2010 Human Development
Report. Three indices above are used:
1. Life Expectancy Index (LEI)= LE - LE minimum .
LE maximum - LE minimum
LE= life expectancy at birth
LE minimum=20
LE maximum= 85

● 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)= MYSI-EYSI

2
● Mean Years of Schooling (MYSI)= MYS . MYS maximum- 15
MYS maximum
● Expected Years of Schooling Index (EYSI): EYS . EYS maximum-18
EYS maximum

3. Income Index (II)= Inc(GNIpc)-Inc(minimum) . Income minimum- $100

Inc(maximum)- Inc(minimum) Income maximum= $75,000
*GNIpc: Gross national income at purchasing power parity per capita

HDI = ∛(LEI) × (EI) × (II)

HDI Categories

The various countries of the world are classified into four major development categories
based on their HDI values.