Study Note - The Development Gap – Human Development Index (HDI)

The Human Development Index (HDI) is a composite indicator of economic development that includes non-economic statistics in an attempt to provide a development measure that is not purely monetary.

The HDI was established by the United Nations Development Programme (UNDP) in 1990, and splits countries into four development categories: Very High Human Development, High Human Development, Medium Human Development and Low Human Development

The methodology used to construct the HDI has changed since its inception, but in 2010 the following indices were used:

- Life Expectancy Index (LEI)

- Income Index (II), and the

- Education Index (EI) which is made up of the Mean Years of Schooling Index (MYSI) and Expected Years of Schooling Index (EYSI). The three main indices are normalised, and the HDI is the geometric mean of all three, providing an equation that looks like this:

“HDI = ” ∛(“LEI×II×EI” )

By removing the focus purely from economic performance the HDI provides a fuller view of the development of a nation than is achieved by many of the other indicators (GNP, Birth Rate etc.).

There has been criticism of the HDI as an overall indicator as it does not include any input about ecological considerations, and it is too heavily focused on using ranked data and national performance. Some countries contain vast differences in development within their borders, such as Russia and China, and therefore an argument can be made for looking at development at a sub-national level.