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The Human Development Indices

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Title: The Human Development Indices


1
The Human Development Indices
  • Oxford, Sep 14 2004
  • Claes Johansson
  • United Nations Development Programme
  • Human Development Report Office

2
The Human Development Indices
  • The HDI (Human Development Index)
  • - a summary measure of human development
  • The GDI (Gender-related Development Index)
  • - the HDI adjusted for gender inequality
  • The GEM (Gender Empowerment Measure)
  • - Measures gender equality in economic and
    political participation and decision making
  • The HPI (Human Poverty Index)
  • - Captures the level of human poverty

3
The dimensions and indicators of the HDI
  • HDI has three dimensions, measured by one or two
    indicators each
  • Leading a long and healthy life
  • Life expectancy at birth
  • Education
  • Adult literacy rate
  • Gross primary, secondary and tertiary enrolment
  • A decent standard of living
  • GDP per capita (PPP US)

4
What dimensions to include
  • The concept of human development has many
    dimensions
  • Health, education and standard of living are
    dimensions that are basic and can be measured
  • Proposed additions either are hard to measure or
    overlap with existing dimensions - Examples
    political freedom, environment, child mortality
  • HD can never be captured in single indicator!

5
Combining indicators for the HDI
  • In order to create the HDI, goalposts are
    chosen for each indicator
  • Using goalposts rather than observed minima and
    maxima allows comparisons over time
  • Set with the timeframe 1960-2050
  • Also set to allow for disaggregation some
    subgroups can have lower values than observed in
    country data

6
Goalposts for calculating the HDI
Indicator Minimum value Maximum value
Life expectancy 25 years 85 years
Adult literacy 0 100
Gross enrolment 0 100
GDP per capita 100 (PPP US) 40,000 (PPP US)
7
Calculating the HDI
  • Dimensions
  • Indicators
  • Dimension
  • index
  • A long and
  • healthy life
  • Life
  • Expectancy
  • Life
  • Expectancy
  • Index

Being Knowledgeable Literacy Enrolment
Education Index
A decent standard of living GDP per
capita GDP Index
The HDI
8
Calculating the HDI an example (Zambia)
Life expectancy index
Education index
Income index
HDI
Literacy (2/3)
Enrolment (1/3)
100
100
1
85 years
1
40,000
1
1
78.1
0.68
49
0.433
0.34
780
41.4
0.27
0
0
0
100
0
25 years
0
0
(log scale)
0.27 0.68 0.34

0.433
3
9
The weights in the HDI
  • The three dimensions in the HDI health,
    education, standard of living weighted equally
  • Equal weighting is not an accident reflects a
    belief that all three are equally important
  • Assumption of substitutability central, but
    sometimes forgotten
  • Changing the weighting, even drastically, maintain

10
Changing weights what would happen?
  • How sensitive is the HDI to changing weights?
  • Not very for the full set of countries, the
    components are highly correlated
  • Does not implicate redundancy in sub-groups,
    large differences in how income is translated
    into other dimensions

Life expectancy Education GDP
Life expectancy - 0.74 0.78
Education - 0.75
GDP -
11
Average absolute rank change with changing weights
12
Correlation with the HDI with increasing weights
by subcomponent
13
Why include GDP per capita?
  • GDP per capita included as a proxy for a decent
    standard of living
  • Reflects a number of issues not explicitly
    included the expanding choices available in many
    areas with increasing income
  • Logarithm of GDP is used reflects diminishing
    return in expanding choices

14
Critiques of the HDI
  • Critiques
  • Are these all the dimensions of HD?
  • Are these indicators good measures of the
    dimensions?
  • What about inequality?
  • Can it capture policy changes?
  • Ranking countries unknown uncertainties
  • Why cap values?
  • Why have an index at all?

15
Critiques, cont.
Missing components
  • What about future generations an environmental
    degradation component?
  • Political freedoms and rights?
  • Culture
  • Nutritional status
  • Uncertainty
  • Personal security

16
Critiques incorporated in the HDI
Critiques that have been incorporated
  • Absolute maximum and minimum values for each
    indicator
  • Supplementing literacy with a second education
    indicator
  • Changing the adjustment of GDP per capita

17
Political freedom
  • Political freedom index (PFI) presented in HDR
    1991
  • Meant to be incorporated in the HDI
  • Caused technical and political controversy
  • Ultimately dropped because of the difficulties of
    measurement

18
Key data problems
  • Literacy
  • Conceptually and practically limited
  • Definition and collection of literacy varies
    widely from country to country
  • Culturally specific script systems and other
    factors vary across the world
  • UNESCO Institute of Statistics LAMP programme

19
Key data problems, cont.
  • GDP per capita (PPP US)
  • Based on the ICP programme, limited to some 60
    countries
  • Based on regressions for other countries
  • Imperfect measure but certainly better than
    exchange rate terms
  • Life expectancy
  • Should measure long and healthy life but does
    not take into account health, just length

20
Staying power of the HDI
Why has the HDI been successful?
  • HDI has become one of the best known and most
    used indicators of development.
  • Despite some remaining controversies, broadly
    accepted and used by media, policymakers and
    academics
  • What factors likely contributed?

21
Staying power of the HDI
Policy relevance, and acceptability
  • Underpinned by four aspects
  • Conceptual clarity that facilitates its power as
    a tool of communication
  • Reasonable level of aggregation
  • Use of universal criteria and variables
  • Use of standardized international data explicitly
    designed for comparison

22
Conceptual clarity
  • Specification of the HDI derived from a clearly
    defined concept
  • Dimensions and variables correspond to the
    concepts of human development
  • Meaning of variables intuitively understandable

23
Reasonable level of aggregation
  • HDI focuses on a set of universally -applicable
    core issues
  • Aggregating too many issues tends to compromise
    analytical usefulness and policy relevance
  • Separate indices for e.g. gender empowerment,
    human poverty

24
  • Universally-relevant concepts and variables
  • High degree of consensus that more is better in
    each of the variables
  • In contrast with e.g. election frequency, voter
    turnout, share of largest party

25
  • Uses data that are legitimized through the
    international statistical system
  • Of course, still data problems but data have been
    standardized to ensure inter-country comparability

26
Appropriate uses of the HDI
  • Ordinal vs. cardinal HDI value has a meaning
    but it is not intuitive and should be used
    carefully
  • Ranking
  • Example reversals in HDI? Arguably meaningful
    exercise, if weights are accepted

27
Other indices
The Human Poverty Indices (HPI-1 and HPI-2)
  • Whereas HDI measures average achievement, the HPI
    measures deprivations
  • Separate indices for developing countries (HPI-1)
    and high-income OECD countries (HPI-2)

28
Other indices
The deprivational perspective
  • HDI and GDI focus on national averages
    (conglomerative aspect)
  • HPI focuses on the worst off (deprivational
    aspect)

29
Other indices
Why separate indices
  • Distinguishing between developing and OECD
    countries recognized the relative nature of
    poverty
  • Allows the use of richer, more appropriate data
  • Different deprivations are more relevant in
    different contexts

30
Other indices
  • The Human Poverty Index for developing countries
    (HPI-1)

31
Other indices
  • The Human Poverty Index (HPI-1)

Where
P1Probability of not surviving to age 40 (times
100)
P2Adult illiteracy rate
P3 Average of people without access to safe
water and children underweight
As ? rises greater weight is given to the
dimension in which there is most deprivation. ?1
implies simple average (perfect
substitutability), ?8 tsets HPI highest value
(no substitutability). In he global HDR ?3,
giving additional but not overwhelming weight to
areas of most acute deprivation
32
? in the HPI formula
  • As ? rises greater weight is given to the
    dimension in which there is most deprivation.
  • ?1 implies simple average (perfect
    substitutability),
  • ?8 HPI highest value (no substitutability).
  • In the global HDR ?3, giving additional but not
    overwhelming weight to areas of most acute
    deprivation

33
Other indices
  • The Human Poverty Index for OECD countries (HPI-2)

34
Other indices
  • The Human Poverty Index (HPI-2)

Where
P1Probability of not surviving to age 60 (times
100)
P2Functional illiteracy rate
P3Relative income poverty (population below 50
median income)P4 Long-term unemployment
As ? rises greater weight is given to the
dimension in which there is most deprivation. In
the global HDR ?3, giving additional but not
overwhelming weight to areas of most acute
deprivation
35
Other indices
  • The Gender-related development Index (GDI)
  • Same components as the HDI
  • After calculating dimension index for each sex
    they are combined in a way to penalize gender
    equality (equally distributed index)
  • The GDI is calculated by taking the unweighted
    average of the three equally distributed indices

36
Other indices
  • The Gender-related development Index (GDI)

Formula for the equally distributed index
determines the size of gender equality in a
society. In the global HDR it is set at 2.
37
Goalposts for calculating the GDI
Other indices
Maximum Value
Minimum value
Indicator Life expectancy Female
27.5 years 87.5 years Male
22.5 years 82.5 years Adult
literacy 100
0 Gross enrolment 100
0 GDP per capita
40,000(US) 100(US)
38
Other indices
  • The Gender Empowerment Measure

39
Other indices
  • The Gender Empowerment Measure
  • Calculate dimension index and equally distributed
    equivalent percentage (EDEP) for each dimension
    (like GDI)
  • For political and economic decision making divide
    EDEP by 50 (the ideal share women should have)
  • N.B. For political and economic decision making
    EDEP can be calculated directly (as indicators
    are already )

40
Other indices
The Gender Empowerment Measure
  • Income is not logged in the calculation of the
    income index.
  • Again 2, for moderate penalisation of
    inequality

41
Discrimination through the lens of the HDI
Life expectancy
Literacy
Income
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