Human Develompment Index [HDI]-2016


HDI -2016 Key points

  • Among SAARC nations, it’s third behind Sri Lanka (73), Maldives (105).

  • India slipped down one place from 130 to 131 among the 188 countries ranked in terms of human development.
  • Human Development Report (HDR) released by the United Nations Development Programme (UNDP).
  • India’s human development index (HDI) value of 0.624 puts it in the “medium human development” category.
  • The world’s top three countries in HDI are Norway (0.949), Australia (0.939) and Switzerland (0.939)
  • Poverty fell significantly from 1990 to 2015, inequalities sharpened in south asia.


There should be a parameter which can assess growth. Students are measured their performance every year through exams and they are given their performance report assessing their written content in exams. This is to track the growth and filling the gaps or loopholes and correcting mistakes and try to develop further. A nation is also in the same approach, needs to be assessed and track it s growth and perform well in coming days through better ideas providing welfare to its people. Nations have chalked out plans and come to take national overall production per year as a measure to calculate the performance. As the time goes on, Gross Domestic Product (GDP) could not satisfy the proper assessment and ignored completely welfare of the humanity and turned towards economic growth. The economists have gathered and prepared a measurement to upgrade the present system and Human development Index was born. This system of calculation is not an ultimate measurement but a better index to assess the nation’s performance.

Birth of Human Development Index (HDI)

United Nations Development Programme reports consist of these human development reports. Pakistani economist Mahbub ul Haq prepared it with the help of various economists. Nobel Laureate Amartya Sen of India had also prominent role in preparing of Human Development Index (HDI). These reports are seen from 1990 in UNDP reports.

Change in Human Development Index (HDI)

As the time goes on, there are changes in HDI in order to improve the assessment. The recent change in HDI occurred in 2010 report. Changes are necessary in order to maintain the quality. The new methodology of Human Development Index (HDI) calculation is to be discussed here.

What is the new method of calculation of Human Development Index (HDI)?

Human Development Index (HDI) consists of three parameters to assess the quality of life which is referred as human development and well being.
These are
1. Life expectancy
2. Education or Knowledge availability
3. Per capita income of the concerned people of a country.

Life Expectancy Index assessment as per new HDI calculation method

New Life Index calculation has come out with changing its goalposts (minimum and maximum of the life expectancy). For life expectancy, it has taken 1980-2010 as years which are considered to form these values. Minimum value for life expectancy is fixed at 20 years in new calculation. Maximum value for life index is kept at 83.2 years.

How to calculate Life Expectancy Index (LEI) as per new HDI calculation?

Formula to calculate Life Expectancy Index (LEI) = Life Expectancy of a country -20/ 83.2-20

Education Index assessment as per new HDI calculation method

Education Index (EI) assessment is composite of two indices. They are
1. Mean Years of Schooling Index (MYSI)
2. Expected Years of Schooling Index (EYSI)

How to calculate Mean Years of Schooling Index (MYSI) as per new HDI calculation?

Mean Years of Schooling means the spent years by a 25 years or older person in school. The low value was fixed at 0 and the maximum value for mean years of schooling is fixed at 13.2. These values are taken after observation of various countries in the time of 1980-2010.
Formula to calculate Mean Years of Schooling Index (MYSI) = Mean years of schooling – 0/ 13.2 – 0

How to calculate Mean Expected Years of Schooling Index (EYSI) as per new HDI calculation?

Expected Years of Schooling means years that is to be spent by a 5 year old boy in school in a particular country. This assessment of goal posts (Minimum and maximum values) for expected years of schooling is also based on 1980 – 2010 in various countries. Low value for expected years of schooling is fixed at 0 and high value is fixed at 20.6.
Formula to calculate Expected Years of Schooling Index (EYSI) = Expected Years of Schooling – 0/ 20.6 – 0

How to calculate Education Index?

Formula to calculate Education Index = (MYSI X EYSI) 1/2 – 0/ 0.951 – 0

Income Index assessment as per new HDI calculation method

To calculate this index, goal posts are set as per observations during 1980 – 2010 in various countries. Gross National Income per capita is taken as measure to calculate new Income Index in new HDI. Minimum income is set as $163 and maximum income is set as $108,211.

How to calculate Income Index as per new HDI calculation?

Formula to calculate Income Index = Log (Country’s GNIpc) – Log ($163) / Log ($108,211) – Log ($163)

How to calculate Human Development Index as per new method?

Formula to calculate Human Development Index (HDI) = (Life Expectancy Index X Education Index X Income Index) 1/3
New Human Development Index (HDI) is geometric mean of Life Expectancy Index (LEI), Education Index (EI) and Income Index (II).

After this calculation total value will be between 0 and 1. As per the values gained, countries will be placed in the list of division of countries. They are divided into very high human development, high human development, medium high human development and low high human development countries.


Difference between old and new calculation methods of Human Development Index (HDI)


Human development assessment cannot be an easy task as it is multi-dimensional rather than single issue. To assess human development, one index cannot be the solution. Countries utilised Gross Domestic Product as human development which can show only economic sphere excluding all other elements. In order to assess better than GDP and other calculations used by different countries United National Development Programme began to report it through multi-dimensional method known as Human Development Index. It is upgraded all the time to show better results and changed recently to have better result. In 2010 HDI report, this change was used to declare various nations’ HDI.

Changes occurred in new Human Development Index (HDI)

The differences between old and new HDIs are given in below explanation.
The basic differences in old and new HDIs are as follows
1. There is a change of goalposts in three indices of HDI.
2. Geometric mean is taken for assessment of HDI.

There are three indices used in Human Development Index. Those are Life Expectancy Index, Education Index and Income Index. This article gives the comparison of old and new HDIs.

Changes occurred in Life Expectancy Index (LEI) in new HDI calculation

As per old HDI, the minimum life expectancy was 25 years. In new HDI, the minimum life expectancy is reduced to 20 years. As per old HDI, the maximum life expectancy was 85 years. In new HDI, the maximum life expectancy is reduced to 83.5 years. The formula to calculate the LEI is same given in old HDI.

Changes occurred in Education Index (EI) in new HDI calculation

As per old HDI, there were two indices named Adult Literacy Index (ALI) and Gross Enrolment Index (GEI). As per new HDI, these are replaced by Minimum Years of School Index (MYSI) and Expected Years of Schooling Index (EYSI). MYSI is given minimum value as zero and maximum value as 13.2 and EYSI is given minimum value of zero and maximum value as 20.6. For total education index minimum value is set as zero and maximum value is set as 0.951. The formula is changed for calculation of new Education Index, which you can gain from below link about new HDI.

Changes occurred in Income Index (II) in new HDI calculation

As per old HDI, the minimum income was $100 and maximum was $40, 000. As per new HDI, the minimum income is $163 and maximum income is $108, 211. In old HDI, Gross Domestic Product was taken and in new HDI, Gross national Income was taken. The formula to calculation of new Income Index remained the same.

Changes occurred in new HDI calculation

There used to be taking of average mean of three indices to determine old HDI, but as per new HDI, the geometric value of three indices is taken as HDI.

Conclusion
Human Development Index is even though is not ultimate index to calculate and assess human development, it is better than other indices which are being used by various countries. Now, there can be assessment as per the new HDI which can better assess than old HDI.


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