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Human Development Index, Physical Quality of Life Index and SocioEconomic Development

Presented By:
Sushant Mishra

HDI- Introduction

The basic objective of development is to create an enabling environment in which people can enjoy long, healthy and creative lives. wrote Mahbub-ul-Haq in the first Human Development Report in 1990. The Human Development Index (HDI) is the measure of life expectancy, literacy, education, and standard of living for countries worldwide. It is used to determine and indicate whether a country is a developed, developing, or underdeveloped country.

The index was developed in 1990 by Indian Nobel prize winner Amartya Sen, Pakistani economist Mahbub ul Haq, with help from Gustav Ranis of Yale University and Lord Meghnad Desai of the London School of Economics. The HDI measures the average achievements in a country in three basic dimensions of human development: A long and healthy life, as measured by life expectancy at birth. Knowledge, as measured by the adult literacy rate (with two-thirds weighting) and the combined primary, secondary, and tertiary gross enrollment ratio (with one-third weighting). A decent standard of living, as measured by the log of gross domestic product (GDP) per capita at purchasing power parity (PPP) in USD.

How to Calculate HDI


In general to transform a raw variable, say x, into a unit-free index between 0 and 1 (which allows different indices to be added together), the following formula is used: x-index =

where and are the lowest and highest values the variable x can attain, respectively. The Human Development Index (HDI) then represents the average of the following three general indices: Life Expectancy Index =

Education Index =

Adult Literacy Index (ALI) =

Gross Enrolment Index (GEI) =

GDP Index =

where, LE: Life expectancy at birth ALR: Adult literacy rate (ages 15 and older) CGER: Combined gross enrolment ratio for primary, secondary and tertiary schools GDPpc: GDP per capita at PPP in USD.

World Map Indicating Human Development Index 2006

high (0.8001) medium (0.5000.799) low (0.3000.499) 2006 data not available

Some Facts about HDI


India HDI- 0.611 Norway highest ranked since 2001 (HDI=0.965). Niger lowest ranked (HDI= 0.311). Canada dominated in the 90s.

India-HDI Growth
HDI Growth of INDIA 0.7 0.6 0.5
0.413 0.439 0.477 0.515 0.548 0.577 0.611

HDI

0.4 0.3 0.2 0.1 0 1975 1980 1985 1990 1995 2000 2004

Years

Why Use HDI?


Relates the Money available to its utilization by and for the Public. HDI reflects the positive association between income on one side and health and education on the other. Shows the efficiency of the Government policies.

Examples of Invert Performance of Countries


Bahrain and Chile
Angola and Tanzania Namibia and Egypt

Drawbacks

Anomalous Data results in erroneous values. The index is not in any sense a comprehensive measure of human development. It does not include important indicators such as respect for human rights, democracy and inequality.