HDI• The index was developed by Pakistan

economist Dr. Mahboob ul Haq, Sir Richard Jolly with the help of Gustav Renis of Yale University and Lord Meghnad Desai of London School of Economics.

• Used by UNDP in its human development reports since then

• The HDI uses measures of life expectancy, literacy, education attainment, and GDP per capita for countries world wide

HDI

• The basic use of HDI is a composite measure of a country’s development (life expectancy, education and living standard)

• Life expectancy at birth, a measure of pop health and longevity.

• Education and knowledge as measured by adult literacy rate with 2/3 weighting and the combined primary, secondary and tertiary ratio with 1/3 ratio

• Living standard as measured by GDP per capita at purchasing power parity in US$

HDI

EI

GDPHI

Formula• In general to transform a raw variable say (x) into

a unit free index b/w 0-1 (which allows indices to be added together) the following formula is used:

• X index = x - max (x)/ max (x)-min (x)• Min(x), Max (x), are minimum and maximum

values x can attain• The HDI then represent the average of the

following three indices:

Source: http://www.slideshare.net/Milanregmi/hdi-17271295

Formula for HDI• Life expectancy index = LE-20/90-20

• Education index = 2/3 x ALR + 1/3 General

• Adult literacy rate = ALR-0/100-0

• Gross enrollment index (GEI) = CGER-0/100-0

• GDP index = log (GDP pc)- log(100)/Log (40000)-log (100)

• HDI = Education index + health index + economic index/3