This document discusses the Human Development Index (HDI), which is a composite index used to rank countries by level of "human development" based on indicators of health, education, and income. It provides background on the HDI, explaining that it aims to assess development by focusing on people's capabilities and freedom rather than just economic growth. The document then outlines how the HDI is calculated using fixed minimum and maximum values for life expectancy, education, and income indicators. It acknowledges some limitations of the HDI in only focusing on a few dimensions and not capturing intra-country variations or short-term changes.

1. HUMAN DEVELOPMENT INDEX
BY FARHEEN ABDUL HAMEED
CLASS 11-B

2. “Mahatma Gandhi once commented
that “the difference between what we do and what we are
capable of doing would suffice to solve most of the world’s
problems.”
2006 GLOBAL HUMAN DEVELOPMENT REPORT

3. INTRODUCTION
“Wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something
else.” –Aristotle
“something else”
opportunity to realize their potential as human beings about having real choices
Realization of human potential.
Nobel laureate Amartya Sen calls the capabilities and functionings approach. Not only is it important to
achieve more “functionings,” but it is essential for people to have the “capabilities” or the freedom to
achieve these

4. INTRODUCTION
• The emphasis on growth was based on the assumption that its benefits will
automatically“trickle down” to poor and marginalized people.
• The global HDR has created and developed four main composite human development indices
to assess measurable dimensions of human development.
• Human development index (HDI),
• The human poverty index (HPI),
• The gender-related development index (GDI) and
• The gender empowerment measure (GEM)

6. • Measuring is as more relevant than ever
• Quantifying and describing our changing world
• Finding ways of improving people’s well-being:
• Informed policy making and advocacy
• Human development is an evolving idea
• As the world changes – analytical tools change
• But there is a persistent importance of the chain:

20. • How to anchor HDI values?
• Through normalized variables
• -Necessary for comparability on the same scale.
• - Only after rescaling they can be combined into a single
scalar – a composite index.
• Enable each dimension index to range between 0 and 1
• 𝐼_𝑥=𝐼(𝑥,𝑚_𝑥,𝑀_𝑥 )=(𝑥−𝑚_𝑥)/(𝑀_𝑥−𝑚_𝑥 )
• 𝑥−𝑚_𝑥 - net variable
• 𝑀_𝑥−𝑚_𝑥 - reference level (range)
• Cardinal interpretation:
• “Distance” travelled or
• Achievement in % of the reference level

21. CALCULATION OF HDI
To construct the index, fixed minimum and maximum values have been established for each of these
indicators:
• Life expectancy at birth: 25 years and 85 years
• Adult literacy rate: 0 & 100 %
• Combined gross enrolment ratio: 0% & 100 %
• Real GDP per capita (PPP$): $100 & $40,000 (PPP$)

34. • Human Development Index
• Emphasizes that outcomes for people and their capabilities should be the ultimate criteria for assessing the progress
of a country, not economic growth alone.
• Accounts for average achievements in
• life expectancy (proxy for leading a long and healthy life),
• education (proxy for being knowledgeable) and
• income per capita (proxy for command over resources to have a decent standard of living).

41. • Logarithmic transformation in other dimensions
• There are arguments for and against transforming the health and education variables to account for
diminishing returns.
• Health and education are not only of intrinsic value; they, like income, are instrumental to other dimensions of
human development not included in the HDI.
• Their ability to be converted into other ends may likewise incur diminishing returns.

42. LIMITATIONS OF HDI:
• Not a comprehensive measure of human development. It only focuses on three dimensions of
capabilities.
• The HDI is not designed to assess progress in human development over a short-term period because
two of its component indicators—adult literacy and life expectancy at birth—are not responsive to
short-term policy changes.
• Like any average country measure, the HDI does not account for variations in human development
within the country.
• Countries with the same HDI may be very different in how human development is distributed, either
from region to region, or from social group to social group.

67. THANK YOU……