Home / Introduction to Economics / What is HDI;(Human Development Index )How Is HDI Calculated?
What is HDI;(Human Development Index )How Is HDI Calculated?

What is HDI;(Human Development Index )How Is HDI Calculated?

HDI stands for Human Development Index an important measure designed by the United Nations to assess the quality of life and economic development of a population .The Human Development Report (HDR) is prepared annually by the United Nations Development Program (UNDP) based on three criteria (Health, Education and Income), which are measured as follows:

  • A long and healthy life ( Health ): life expectancy at birth.
  • Access to knowledge ( Education ): average years of schooling (adults) and expected years of schooling (children).
  • A decent standard of living ( Income ): measured by Gross National Income (GNI) based on Purchasing Power Parity (PPP) per capita.

What is HDI;(Human Development Index )How Is HDI Calculated?

The HDI ranges from 0 (no human development) to 1 (total human development). The world average of the 188 countries evaluated in 2014 was 0.702.

Changes in UNDP 2011

In 2010, 169 countries were analyzed. In 2011 and 2012, the number of countries and territories analyzed was 187. This change makes it difficult to compare rankings between the data from the 2010 reports and subsequent years.

Pnud 2018 (data for 2017)

In 2017 data were collected from 189 countries.

Placing in the HDI Ranking of some countries:

(UNDP data for 2018 for the year 2017)

1º – Norway – 0,953

2º – Switzerland – 0,944

3º – Australia – 0,939

4º – Ireland – 0,938

5º – Germany – 0,936

6th – Iceland – 0.935

7th – Hong Kong – 0.933

7th – Sweden – 0.933

9th – Singapore – 0.932

10th – The Netherlands – 0.93.

How Is HDI  Calculated?

The HDI is graded from 0 to 1. Indicator 0 corresponds to no human development and indicator 1 represents total human development. The closer the country is to index 1, the more developed it is.

To calculate the HDI, three factors are analyzed: education, health and gross national income (GNI). The data used for the calculation are collected by UNDP in international databases such as the International Labor Organization and the World Health Organization.

In the education factor is evaluated the expected time of schooling and the average time of study of the population. In the item of health is evaluated the life expectancy at birth and the life expectancy of the population. The gross national income index is obtained by analyzing the gross income of the country (gross domestic product) and the purchasing power of the inhabitants.

From the analysis of the final indices the countries are classified in human development bands, as follows:

  • HDI less than 0.550: low human development;
  • HDI between 0.551 and 0.699: medium human development;
  • HDI between 0.700 and 0.799: high human development;
  • HDI above 0.800: very high human development.

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