Composite Indicators

What is the Human Development Index?

• The HDI is a composite index that brings together three variables to measure development.
• Three Variables: A long and healthy life, Education, and Standard Of Living.
• These three variables are combined to give an index value between 0 and 1.
• Higher score means higher development.

Long and Healthy Life

• Measured by life expectancy from birth.
• Assumes that those who live longer live healthier lifestyles.

Education

• Measured by adult literacy rate.
• Also measures primary, secondary, and tertiary school enrollment.

Standard Of Living

• AKA Able to meet basic needs.
• Measured by GDP per capita.
• Converted at PPP US$.

UNDP Puts Countries Into 4 Categories

• Very high human development, .900 or above.
• High human development, .800-.899.
• Medium human development, .500-.799
• Low human development, less than .500

Untitled Slide

• GDP per capita can be linked to overall HDI.
• Country with highest HDI is Norway with .971.
• United States is 13th with an HDI of .956.
• Extreme cases such as Saudi Arabia rank 40th in GDP but 50th in HDI.