Human development indicators

3.  The HDI is a summary composite measure of a country's
average achievements in three basic aspects of human
development: health, knowledge and standard of living. It
is a measure of a country's average achievements in three
dimensions of human development:
 a long and healthy life, as measured by life expectancy at
birth;
 knowledge, as measured by mean years of schooling and
expected years of schooling; and
 a decent standard of living, as measured by GNI per capita
in PPP terms in US$.
 The HDI sets a minimum and a maximum for each
dimension, called "goalposts", then shows where each
country stands in relation to these goalposts. This is
expressed as a value between 0 and 1. The higher a
country's human development, the higher its HDI value.

4.  The HDI is used to capture the attention of policy-makers, the media
and nongovernmental organizations, and to change the focus from the
usual economic statistics to human outcomes. It was created to re-
emphasize that people and their capabilities should be the ultimate
criteria for assessing the development of a country, not economic
growth.
 The HDI is also used to question national policy choices and to
determine how two countries with the same level of income per person
can have widely different human development outcomes. For example,
two countries may have similar incomes per person, but have drastically
differing life expectancy and literacy levels, such that one of the
countries has a much higher HDI than the other. These contrasts
stimulate debate on government policies concerning health and
education to determine why what can be achieved in one country is
beyond the reach of the other.
 The HDI is also used to highlight differences within countries, between
provinces or states, and across genders, ethnicities and other
socioeconomic groupings. Highlighting internal disparities along these
lines has raised the national debate in many countries.

5.  The Human Development Index (HDI) is a summary
measure of average achievement in key dimensions of
human development: a long and healthy life, being
knowledgeable and have a decent standard of living. The
HDI is the geometric mean of normalized indices for each
of the three dimensions.
 The health dimension is assessed by life expectancy at
birth, the education dimension is measured by mean of
years of schooling for adults aged 25 years and more and
expected years of schooling for children of school entering
age. The standard of living dimension is measured by
gross national income per capita. The HDI uses the
logarithm of income, to reflect the diminishing importance
of income with increasing GNI. The scores for the three
HDI dimension indices are then aggregated into a
composite index using geometric mean. Refer to Technical
notes for more details.

6.  The HDI can be used to question national policy
choices, asking how two countries with the same level
of GNI per capita can end up with different human
development outcomes. These contrasts can
stimulate debate about government policy priorities.
 The HDI simplifies and captures only part of what
human development entails. It does not reflect on
inequalities, poverty, human security, empowerment,
etc. The HDRO provides other composite indices as
broader proxy on some of the key issues of human
development, inequality, gender disparity and
poverty.
 A fuller picture of a country's level of human
development requires analysis of other indicators and
information presented in the HDR statistical annex.

7.  This report provides a comprehensive picture of acute
multidimensional poverty to inform the work of countries and
communities building a more just future for the global poor. Part
I focuses on where we are now. It examines the levels and
composition of multidimensional poverty across 109 countries
covering 5.9 billion people. It also discusses trends among more
than 5 billion people in 80 countries, 70 of which showed a
statistically significant reduction in Multidimensional Poverty
Index value during at least one of the time periods presented.
While the COVID-19 pandemic’s impact on developed countries
is already an active area of research, this report offers a
multidimensional poverty perspective on the experience of
developing countries. It explores how the pandemic has affected
three key development indicators (social protection, livelihoods
and school attendance), in association with multidimensional
poverty, with a focus predominantly on Sub-Saharan Africa

8.  Part II profiles disparities in multidimensional poverty
with new research that scrutinizes estimates
disaggregated by ethnicity or race and by caste to
identify who and how people are being left behind. It
also explores the proportion of multidimensionally
poor people who live in a household in which no
female member has completed at least six years of
schooling and presents disparities in
multidimensional poverty by gender of the household
head. Finally, it probes interconnections between the
incidence of multidimensional poverty and intimate
partner violence against women and girls. The
publication of the 2021 Multidimensional Poverty
Index Report was supported by financial contribution
by the Republic of Korea.

10.  The new report "Nepal Multidimensional Poverty Index:
Analysis Towards Action" shows Nepal succeeded to lift
3.1 million people out of multidimensional poverty in five
years (between 2014 and 2019). Launched today by the
National Planning Commisison, the report was prepared
with technical support from OXFORD/OPHI, UNDP and
UNICEF. While the report shows a marked reduction in
multidimentional poverty, still 4.9 million people are
multi-dimensionally poor, which is 17.4% of Nepal’s
population.
 This MPI Report 2021 is based on the Nepal Multiple
Indicator Cluster Survey Report (NMICS) 2019. The MPI
covers a subset of priorities ar- ticulated in the current
15th Plan, Sustainable Development Goals: Status and
Roadmap 2016- 2030 Report and Constitution of Nepal
2015.

13.  Multidimensional Poverty Index (MPI) is an international measure of acute multidimensional
poverty covering over 100 developing countries.
 Multidimensional Poverty Index (MPI) is an index designed to measure acute poverty, understood
as a person’s inability to meet minimum internationally agreed standards.
 MPI complements traditional monetary poverty measures by capturing the acute deprivations in
health, education, and living standards that a person faces simultaneously.
 Multidimensional Poverty Index looks into more than just income or consumption, the traditional
measures of poverty.
 In other words, MPI measure those experiencing multiple deprivations. For example, people who
are undernourished, and do not have access to electricity or cooking fuel.
 Fundamentally, MPI reflects deprivations in very basic services and core human functioning for
people across 104 countries.
 Multiple Poverty Index provides an alternative lens through which poverty may be viewed
and understood through dimensions, indicators, and deprivation criteria.
 MPI is composed of 3 dimensions made up of 10 indicators (mentioned below)
 Among the 10 indicators, two are for health, two are for education and six indicators are for living
standards.
 The indicators of MPI are closely linked to the Sustainable Development Goals (SDGs).

15.  MPI is the product of Incidence (H) and Intensity (A).
 MPI= Incidence of poverty (H) * Intensity (A) of
poverty
 where,
 Incidence of poverty (H): is proportion of people identified
as poor on the basis of the multiple deprivations they
experience. ‘H’ denotes headcount ratio.
 Intensity of poverty (A): is how poor people are i.e.,
average proportion of (weighted) deprivations poor people
experience. A denotes average deprivation share.

16.  Imagine two countries: in both, 60% of people are poor. This 60% is the
incidence of poverty in both the countries. Based on this incidence, the two
countries are equally poor.
 Now, imagine that in one of the two countries, poor people are deprived –
on average – in one-third of the dimensions, whereas in the other country,
the poor are deprived – on average – in two-thirds of the dimensions.
 By combining the two pieces of information (i.e., the intensity of
deprivations and the proportion of poor people), we can see that these two
countries are not equally poor.
 Moreover, the second country is poorer than the first because the intensity
of poverty is higher among the poor.

17.  Helps to create comprehensive picture: MPI depicts who is poor and how they are
poor. So, it can be used to create a holistic picture of people living in poverty.
 Highly comparative and replicable: MPI allows for comparison between countries or
regions. It also allows within country comparison among different groups, urban and
rural areas etc.
 Flexibility, Choice and Identifications: MPI can be adopted to different context with
different unit of analysis whether developed or undeveloped countries. Transparency is
maintained which helps in the clear identification of who is poor and communications is
easy. As increase in the number of dimensions, measurement will be able to focus more
acutely on poorest of poor.
 Effectiveness: The indicators used here have immediate practical applications and can
be used to target poorest of poor more effectively.
 Prioritizing: MPI prioritizes work at both system level and the level of
individuals/families
 Working Levels: MPI makes it possible to work on three levels; individual, agency and
community. It also ensures implementation of policies through engagement of partners
at various levels.

18.  Comparison: MPI provides basis to compare each
individual’s achievement against the respective
dimensions specific cut offs.
 Calculation: Well- being of different groups in the
population can be calculated from it. For example;
people from certain ethnic groups, regions, gender.
 Simplification: The measurements can be broken
down into dimensions to reveal what dimensions
contribute to the most dimensional poverty.

19.  Poverty is a complex issue and depends on lot of factors; it
is difficult or impossible to address all elements.
 Gathering of data for multidimensional indicators can be
challenging.
 Due to large numbers of indicators, it can become
overwhelming to deal and to make proper assessment
leading to ineffective implementation.
 Intra-household inequality and inequality amongst the poor
is not captured.
 Which and how many dimensions are relevant and should
be considered or privileged are difficult to quote.

21.  Human development index as an indicator of development
was developed by the United Nations Development
Programme (UNDP).
 It has been used in Human Development Report Published
since 1989.
 Human development Index (HDI) is a composite
criterion consisting of three indicators of development to
measure the level of welfare of the people of the country:
 ADVERTISEMENTS:
 1. Life Expectancy Indicators (LEI)
 2. Educational Attainments Indicators (EAI)
 3. Standard of Living Indicators (SLI)

22.  1. Life Expectancy Indicators:
 It refers to the life expectancy at birth which implies that number of years a
newly born baby is expected to live. High life expectancy at birth indicates a
high level of development and vice versa.
 2. Educational Attainment:
 It refers to the level of education attained by the people of the country on an
average basis.
 ADVERTISEMENTS:
 The constituents of educational attainments are:
 (a) Adult literacy rate
 (b) Gross enrolment ratio
 While the former represents the percentage of people aged 15 and above who
can understand read and write a short and simple statement in their everyday
life. The latter shows the percentage of population enrolled at primary,
secondary and university level. Higher gross enrolment ratio represents higher
level of development

23.  3. Standard of Living of the People:
 Real GDP per capita is considered as the indicator of the
standard of living of the people.
 When we divide the GDP at constant price by the total
population of the country, we get real GDP per capita.
 Real GDP per capita is also known as real per capita
income.
 Higher per capita real income usually represents a higher
standard living.

24.  Human development index can be constructed by first
constructing the individual indices of the above three
components and then taking the simple average of the
indices.
 To construct the relevant indices, the UNDP first fixes
the maximum and minimum values of each indicator
for a particular year and then with the help of the
following formula, one can arrive at the achievement
level of the country concerned in respect of a particular
indicator.

26.  For example the life expectancy at birth of a particular
country is 65 years.
 Assuming maximum value and minimum value of life
expectancy to be 80 and 20 respectively for a particular
year, the life expectancy index can be calculated as
follows:

27.  As calculated above, the individual indices of
educational attainments and adjusted real GDP per
capita can be found out for a particular year.
 Then by taking simple arithmetic average of all the
three indices, we can get human development index for
the country concerned.

28.  WhereEAI = Educational Attainment Index
 LEI = Life Expectancy Index
 SLI = Standard of Living Index or real GDP per capita index
 From the above discussion it is clear that human development index
emphasizes the quality of life in contrast to the national and per capita
income which only focus on quantitative aspects of development.
 According to Human Development Report 2001, India was in
115th position in the World out of 174 countries in terms of human
development index prepared for the year 1999.
 In 2004, India’s position went down to 127.
 In India, the planning commission has prepared the Human
Development Index for different states and union territories for 2001.
 According to the report, Kerala ranks first (0.638) followed by Punjab
(0.537). Orissa’s position is 11th in the order (0.404)

29.  The most common way of measuring poverty is to calculate the percentage of
the population who are poor, known as the headcount ratio (H). Having
identified who is poor, the AF methodology generates a unique class of poverty
measures (Mα) that goes beyond the simple headcount ratio. Three measures in
this class are of high importance:
 Adjusted headcount ratio (M0), otherwise known as the MPI: This measure
reflects both the incidence of poverty (the percentage of the population who are
poor) and the intensity of poverty (the percentage of deprivations suffered by
each person or household on average). M0 is calculated by multiplying the
incidence (H) by the intensity (A). M0 = H x A.
 Adjusted Poverty Gap (M1): This measure reflects the incidence, intensity and
depth of poverty. The depth of poverty is the average ‘gap’ (G) between the
level of deprivation poor people experience and the poverty cut-off
line. M1 = H x A x G.
 Adjusted Squared Poverty Gap (M2): This measure reflects the incidence,
intensity, and depth of poverty, as well as inequality among the poor (captured
by the squared gap, S). M2 = H x A x S

30.  M0 can be calculated with ordinal as well as cardinal
data, which is why it is most often used. Cardinal data
are required to calculate M1 and M2.
 The AF Method is unique in that by measuring
intensity it can distinguish between, for example, a
group of poor people who suffer two deprivations on
average and a group of poor people who suffer five
deprivations on average at the same time

31.  The Human Development Index (HDI) is a summary measure of average achievement in
key dimensions of human development: a long and healthy life, being knowledgeable
and have a decent standard of living.
 The HDI is the geometric mean of normalized indices for each of the three dimensions.
 The health dimension is assessed by life expectancy at birth, the education dimension is
measured by mean of years of schooling for adults aged 25 years and more and expected
years of schooling for children of school entering age.
 The standard of living dimension is measured by gross national income per capita.
 The HDI uses the logarithm of income, to reflect the diminishing importance of income
with increasing GNI.
 The scores for the three HDI dimension indices are then aggregated into a composite
index using geometric mean.
 Refer to Technical notes for more details.
 The HDI can be used to question national policy choices, asking how two countries with
the same level of GNI per capita can end up with different human development
outcomes.
 These contrasts can stimulate debate about government policy priorities

32.  The HDI simplifies and captures only part of what
human development entails.
 It does not reflect on inequalities, poverty, human
security, empowerment, etc.
 The HDRO provides other composite indices as
broader proxy on some of the key issues of human
development, inequality, gender disparity and poverty.
 A fuller picture of a country's level of human
development requires analysis of other indicators and
information presented in the HDR statistical annex.

36.  Critics argue that the HDI assigns weights to certain
factors that are equal tradeoffs when these
measurements may not always be equally valuable. For
example, countries could achieve the same HDI
through different combinations of life expectancy and
GNI per capita. This would imply that a person's life
expectancy has an economic value.


37.  An additional year of life would add to the GNI and thus be
different in countries with different GNI per capita.
 It also correlates factors that are more common in developed
economies. For example, a higher level of education would tend
to lead to higher GNI per capita. Critics argue the benefit or lack
thereof of including two highly correlated values when perhaps
one would be a better indicator of a country's well-being.
 The HDI also fails to take into account factors such as
inequality, poverty, and gender disparity.3 A country with a high
value for GNI per capita would indicate a developed country, but
what if that GNI is reached by marginalizing certain genders or
ethnic classes? And what if that GNI is achieved by a small
percentage of the population that is wealthy and, therefore,
ignores the poor?4

38.  Furthermore, the values of the factors that make up the
HDI are bound between 0 and 1. This means that
certain countries that already have high GNIs, for
example, have little room to improve in terms of GNI
score even if their GNI continues to grow and improve.
This same parameter affects the logic of the life
expectancy score.

39.  Why Is the Human Development Index (HDI)
Controversial?
The HDI is controversial because it is highly
influential yet considered to be deeply flawed.
The United Nations itself even admits that the
HDI is not “a comprehensive measure of human
development” and that the index is slow to
reflect recent policy changes and
improvements to the lives of a nation’s
citizens.

40.  What Are the Biggest Criticisms of the HDI?
 The HDI was designed to measure
development not just in terms of how much
money people have but also in terms of
education and length of life. The problem is
not everyone is happy about the choice of
indicators nor the way they are aggregated

41.  The government has shown that the number
of people living below the multi-dimensional
poverty line in Nepal is still 4.98 million or
17.4 percent
 According to the statistics, the highest
number of people under poverty line is 39.5
percent in Karnali and the lowest is 7 percent
in Bagmati. Similarly, it is 25.3 percent in
Sudurpashchim, 24.2 percent in Province-2,
18.2 percent in Lumbini, 15.9 percent in
Province-1 and 9.6 percent in Gandaki

42.  The factors that have had the most significant
impact on reducing the above mentioned
estimates of poverty incidence, intensity and
severity and have contributed to human
development indicators are (i) increase in
remittance; (ii) growth in agriculture sector and
rise in farm income; (iii) poverty reduction is a
main focus in planned development; (iv) greater
access to rural finance and increase in
microfinance institutions; (v) growth in human
capital development; and (vi) increase in access
to facilities such as roads, schools, health posts,
hospitals, public transportation, markets and
financing

45.  https://hdr.undp.org/data-center/human-development-
index?source=searchad&gclid=Cj0KCQjwkOqZBhDNARIsAACsbfI
-XHC7sNrDtZIPNb89ue7EqMIoZK3EW20yt47csv3RkS--
M3Nv_FEaAj24EALw_wcB#/indicies/HDI
 https://hdr.undp.org/content/2021-global-multidimensional-
poverty-index-
mpi?gclid=Cj0KCQiAkMGcBhCSARIsAIW6d0Cw0nNJ4KBB1uRi3sjU
QQj-s9pUOzYTYHb0lot-z7H-E_0NJpxry78aAuC1EALw_wcB
 https://www.publichealthnotes.com/what-is-multidimensional-
poverty-index-
mpi/#Dimension_Indicators_Calculation_of_Deprivation_and_Wei
ght
 https://www.economicsdiscussion.net/economics-2/human-
development-index-construction-of-hdi-with-example/2133
 https://www.investopedia.com/ask/answers/042815/are-there-
critics-human-development-index-hdi.asp

46.  https://hdr.undp.org/data-center/human-
development-index#/indicies/HDI
 https://english.khabarhub.com/2021/19/20
3866/
 https://www.adb.org/sites/default/files/linke
d-documents/cps-nep-2013-2017-pa-
detailed.pdf