HDI stands for ‘Human Development Index’ which indicates the standard of man’s living taking into account a number of essential indicators. The higher the indicator, the higher the living standard of life. On the other hand, when its value of it decreases, the living standard of life too gets decreased.
What Is HDI or Human Development Index?
The acronym HDI stands for ‘Human Development Index which is a composite indicator having the key indicators of human development like Life expectancy at birth, educational attainment, and a decent standard of living as measured by GDP. Its value fluctuates from ‘0’ to ‘1’.
How HDI Is Measured?
This is a normal query as to how to measure Human Development Index. We will discuss it but before that let’s look at other measures taken by economists and social scientists. Economists use several measures to determine and evaluate economic development. GNP measure, GNP per capita measure and social indicator measures are some of the crucial measures. These two measures have many drawbacks. So, other economists tried to measure it in terms of social indicators.
According to Hicks and Streetens, there are six social indicators for basic needs. These basic needs are (1)Life expectancy at birth, (2)Literacy signifying primary school enrolment as a percent of the population,(3)Calorie supply per head, (4)Infant mortality and percentage of the population with access to potable water,(5) Infant mortality and percentage of the population with access to sanitation and (6) indicator if any relating to housing.
Economists have tried to measure social indicators of basic needs by taking one, two, or more indicators for constructing composite indices of human development. So far, the most important indicators are the Physical Quality of Life Index(PQLI) and the Human Development Index(HDI).
The concept of the Human Development Index has been constructed recently. Lord Meghnad Desai and Nobel Laureate Amartya Sen together invented HDI and for the first time, it was estimated by UNDP under the stewardship of Mehebub-ul-Haq in 1990. Every year since 1990, the UNDP publishes the final list of HDI reports.
To measure Human Development Index(HDI), it takes into account the following indicators:
- Longevity is measured by life expectancy at birth.
- Educational attainment takes into account the value of primary, secondary, tertiary, and adult education.
- The standard of living as measured by real GDP per capita based and purchasing power parity in terms of dollars.
For calculating HDI, Life Expectancy Index, GDP Index, and Education Index are estimated. The value ranges from ‘0’ to ‘1’, whereas ‘0’ is the minimum value and ‘1’ is the maximum value. To calculate the value of each index, it applies the following formula.
Dimension Index= Actual value-Min. value/Max.value-Min.value