HUMAN DEVELOPMENT INDEX
ASSIGNMENT 01
GROUP 5
ERIC PETER MONDOL PRATTYA
MOHAMMAD MAHMUDUL
HASSAN RIYADH
ROMANA YASMEEN 161 0843 025
MOHSINUL ISLAM ZISUN
JAHID HASAN RUPAK
JUNE 27, 2019
CEE 415
DISTRIBUTION OF WORKS AMONG MEMBERS
SECTION AUTHOR(S)
INTRODUCTION 1. ERIC PETER MONDOL PRATTYA
2. MOHAMMAD MAHMUDUL HASSAN
RIYADH
COMPONENTS AND STRUCTURE ROMANA YASMEEN
HDI DATA ROMANA YASMEEN
LIMITATIONS OF HDI MOHSINUL ISLAM ZISUN
CONCLUSION JAHID HASAN RUPAK
CONTENTS
1. INTRODUCTION TO HDI............................................................................................................................. 2
2. COMPONENTS AND STRUCTURE OF HDI .................................................................................................. 2
2.1 Components of the Global HDI ........................................................................................................... 2
2.2 Calculation of the HDI ......................................................................................................................... 3
3. HDI DATA (2015 – 2018) ........................................................................................................................... 4
4. LIMITATIONS OF HDI ................................................................................................................................. 4
5. CONCLUSION ............................................................................................................................................. 4
6. REFERENCES .............................................................................................................................................. 4
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1. INTRODUCTION TO HDI
2. COMPONENTS AND STRUCTURE OF HDI
2.1 Components of the Global HDI
Since 1990 the HDI had three dimensions: (1) a long and healthy life, (2) Knowledge, and (3) a
decent standard of living. Some indicators used to inform the changes in dimensions over time.
As per the most recent HDR, four indicators that are currently used to capture the three
dimensions are as follows:
‘The life expectancy at birth’ is considered as the indicator of a long and healthy life. For
Knowledge, there are two indicators: mean years of schooling of population of ages 25 and over
and the expected years of schooling for children. Lastly, the Gross National Income (GNI) per
capita adjusted by purchasing power parity (PPP) works as indicator for a standard of living. The
dimensions with indicators are summed up in the picture below:
Table 1: HDI dimensions and structure
DIMENSIONS Long and healthy A decent
life Knowledge standard of living
INDICATORS Life expectancy Mean years of Expected years of GNI per capita
at birth schooling schooling
DIMENSION Life expectancy Education Index GNI Index
INDEX index
Human Development Index
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2.2 Calculation of the HDI
Firstly the calculation of HDI requires three separate calculation for indices for each of the three
dimension. These three dimension indices are then used to calculate the global HDI. In each of
the three dimension indices, a country’s achievements are normalized to a score between 0 and
1 using the minimum values. These three dimension indices then aggregated to create the
global HDi by multiplying the indices together and then their cubic root is taken. This produces
the geometric mean of dimension indices (Zavaleta, 2015).
To calculate the indices for each indicator there are some boundaries (minimum and maximum
values) that are recently revised in 2014. The boundaries are summarized in the table below:
Table 2: HDI Dimension Indicators
DIMENSION INDICATOR MINIMUM MAXIMUM
Health Life Expectancy (years) 20 85
Education Expected years of schooling 0 18
Mean years of schooling 0 15
Standard of Living Gross National Income per capita ($) 100 75,000
Equation for Dimension index calculation:
𝑎𝑐𝑡𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒−𝑚𝑖𝑛𝑖𝑚𝑢𝑚 𝑣𝑎𝑙𝑢𝑒
Dimension index =
𝑚𝑎𝑥𝑖𝑚𝑢𝑚 𝑣𝑎𝑙𝑢𝑒−𝑚𝑖𝑛𝑖𝑚𝑢𝑚 𝑣𝑎𝑙𝑢𝑒
Here, the actual value implies the value that are found for a particular country.
For Health, the actual value is the observed life expectancy for a country and the minimum and
maximum values are given in the table.
For education, the index equation is applied to each of the two sub-components, then the
arithmetic mean of the two sub-indices is calculated.
For income, the index equation is modified to incorporate the natural logarithm (ln) of the all
entries:
ln(𝑎𝑐𝑡𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒)−ln(𝑚𝑖𝑛𝑖𝑚𝑢𝑚 𝑣𝑎𝑙𝑢𝑒)
Income Index =
ln(𝑚𝑎𝑥𝑖𝑚𝑢𝑚 𝑣𝑎𝑙𝑢𝑒)−ln(𝑚𝑖𝑛𝑖𝑚𝑢𝑚 𝑣𝑎𝑙𝑢𝑒)
The natural logarithm is considered here due to the transformation function from income to
capabilities is likely to be concave. The logarithmic transformation has the effect of the
lowering the contribution of very high incomes to human development.
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Aggregation:
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The HDI is the geometric mean of the three dimension indices. The formula for aggregation is:
HDI = ∛(𝐼(ℎ𝑒𝑎𝑙𝑡ℎ) ∗ 𝐼(𝑒𝑑𝑢𝑐𝑎𝑡𝑖𝑜𝑛) ∗ 𝐼(𝑖𝑛𝑐𝑜𝑚𝑒))
Where, I = dimension index
3. HDI DATA (2015 – 2018)
HDI for some particular countries in recent years are given below (Human Development Reports, 2018):
Table 3: HDI data table
COUNTRY YEAR
2015 2016 2017 2018
BANGLADESH 0.58 0.59 0.60 0.61
BHUTAN 0.60 0.60 0.61 0.61
INDIA 0.62 0.62 0.63 0.64
PAKISTAN 0.55 0.56 0.56 0.56
4. LIMITATIONS OF HDI
5. CONCLUSION
6. REFERENCES
Human Development Reports. (2018, September 14). Retrieved from United Nation Development
Programme: [Link]
Zavaleta, D. T. (2015). Training Material for Producing National Human Development Reports. UNDP.
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