Calculating the Human Development Indices
The Human Development Indices
• The HDI (Human Development Index)
- a summary measure of human development
The Human Development Indices
• The HDI (Human Development Index)
- a summary measure of human development
• The GDI (Gender-related Development
Index)
- the HDI discounted for gender inequality
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 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
Walk through the steps of calculating –
• The HDI (Human Development Index)
- a summary measure of human development

The 3 steps to creating the index
What dimensions of human development to
include
What indicators to use to capture these
dimensions
How to combine these dimensions and
indicators to create one number
Dimensions
A long and
healthy life
Being
Knowledgeable
A decent
standard
of living
Calculating the HDI
Dimensions
Indicators
A long and
healthy life
Life
expectancy
Being
Knowledgeable
Literacy
&
Enrolment
A decent
standard
of living

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
Income
Index
Calculating the HDI
Dimensions
Indicators
Dimension
Index
A long and

Combined primary, secondary and
tertiary gross enrolment ratio (%)
Standard of living:
GDP per capita (PPP US$)
The critical step – calculating the dimension
index: Measurement of relative performance
For each indicator a minimum and maximum
goalposts must be defined
Actual value
of indicator i
for country j
Minimum X
i,j
Maximum
of indicator i |-------------------------*-----------------| of indicator i
Each indicator must be normalized to a value
between 0 and 1, based on a country’s relative
position
Actual value (X
i,j
) – Minimum of X
i
Index (i, j) = ------------------------------------------------------
Maximum of X
i
– Minimum of X
i
Defining the goalposts
40,000100GDP per capita
(PPP US$)

ALR - 0 ALR
ALR index = --------------- = ----------
100 - 0 100
GER - 0 GER
GER index = --------------- = -----------
100 – 0 100
2. The Education Index (continued)
The Education index is a weighted
average of the ALR index and the GER
index
Education index =
2/3 ALR index + 1/3 GER index
3. The Income Index
The GDP per capita (PPP$) is
transformed to log (GDP per capita) –
meaning increases of income at lower
levels have a greater impact on the
income index
With goalposts for income [100, 40,000]
log (GDP) – log (100)
Income index = -----------------------------------
log (40,000) – log (100)
Creating the income index
0
0.2
0.4
0.6
0.8
1
GDP per capita (PPPUS$)