Human Development Index; Components of Human Development Index, Significance and limitations

Human Development Index
6/26/2017 Palistha Sainju 1

HUMAN DEVELOPMENT INDEX
(HDI)
• PRESENTED BY: PALISTHA SAINJU

Development
The process in which someone or
something grows or changes and becomes
more advanced : healthy growth and development .
The process of developing something new.

Human development
Human development is defined as the process of
enlarging people's freedom allowing them to lead a
healthy life, having decent standard of improved living
and guaranteed human rights.
It values capabilities related to health, education, long
life nutrition as ends in its self and it sees income as the
means to achieve these.

What is Human Development index?
• It is a summary composite, statistic index that measures a
country's average achievements in three basic aspects of
human development: health, knowledge, and a decent
standard of living which are used to rank countries into
four tiers of human development.

THE HUMAN DEVELOPMENT CONCEPT
Human Development is a development paradigm that is
about much more than the rise or fall of national incomes.
People are the real wealth of nations.
HDI It is an index used to rank countries by level of human
development which implies that whether the country is a
developed, a developing or an underdeveloped, and also to
measure the impact of economic policies on quality of life.

The origin of HDI
Mahbub ul Haq Founder of the Human Development Report.
UNDPs Human Development Reports (HDRs). These were
launched in 1990 and had the explicit purpose: ‘‘to shift the
focus of development economics from national income
accounting to people centered policies.’’
It was Amartya Sen’s work on capabilities and functioning that
provided the underlying conceptual framework.

Components of HDI

Health
Health is measured is measured by life expectancy at birth.
Life expectancy at birth is number of years a new born
infant could expect to live if prevailing patterns of age
specific mortality rates at the time of birth stay the same
through out the infant’s life.
The life expectancy at birth component of Hdi is calculated
using minimum value of 20 years and maximum value at 85
years.

Education
The education component of HDI is measured by the mean
of years of schooling for adults aged 25 years and expected
years of schooling for children of school entering age.
Knowledge and education, as measured by the adult
literacy rate (with two-thirds weighting) and the combined
primary, secondary, and tertiary gross enrollment ratio (with
one-third weighting).

Standard of living
Standard of living is measured by the natural logarithm of
gross domestic product (GDP) per capita at purchasing
power parity (PPP) in United States dollars.
Gross national income(GNI) per capita: Aggregate income
of an economy generated by its production and its
ownership of the factors of production, less the income paid
for the use of factors of production owned by the rest of the
world, converted to international dollars using PPP rates
divided by the midyear population.

Changes occurred in new Human
Development Index (HDI)
1. There is a change of goalposts in three indices of HDI.
2. Geometric mean is taken for assessment of HDI.
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. And
now 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.

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.

Calculation of HDI of Nepal
As of 2013
LE= 67.8 years
MYS=3.2
EYS=12.4
GNIpc=$2660
Now,
LEI=
LE−20
85−20
=
67.8−20
85−20
=0.7354

EI=
MYSI+EYSI
2
MYSI=
𝑀𝑌𝑆
15
=
3.2
15
=0.2133
EYSI=
𝐸𝑌𝑆
18
=
12.4
18
=0.6889
Therfore, EI=
0.2133+0.6889
2
=0.4511
AND,
II=
In (2660)−In(100)
In(75000)− In(100)
=0.4956

𝑀𝑌𝑆𝐼 =
𝑀𝑌𝑆
15
𝐴𝑁𝐷 𝐸𝑌𝑆𝐼 =
𝐸𝑌𝑆
18
HERE,
MYSI=mean year of schooling index
EYSI= Expected year of schooling index
MYS=mean year of schooling
EYS=expected year of schooling
𝐼𝑛𝑐𝑜𝑚𝑒 𝑖𝑛𝑑𝑒𝑥(𝐼𝐼) =
𝐼𝑛(𝐺𝑁𝐼𝑝𝑐) − 𝐼𝑛(100)
𝐼𝑛(75000) − 𝐼𝑛(100)

𝐻𝐷𝐼 =
3
𝐿𝐸𝐼 ∗ 𝐸𝐼 ∗ 𝐼𝐼
Where,
HDI= Human Development Index
HDI=
𝟑
𝟎. 𝟕𝟑𝟓𝟒 ∗ 𝟎. 𝟒𝟓𝟏𝟏 ∗ 𝟎. 𝟒𝟗𝟓𝟔 =0.548 (approx).

Top 10 HDI Rankings

Source: UNDP 2016 Human Development Report released
in 21 march 2017

HDI of Nepal
Nepal has graduated to medium human development
grouping in the United Nations’ Human Development
Index (HDI), indicating Nepalese are growing healthier,
becoming more educated and earning more.
Nepal secured a score of 0.558 in HDI in 2015, as
against 0.548 in 2014, says the Human Development
Report 2016 published by the UN.

In the same course of development and with this
score, Nepal secured 144th position in the HDI
among 188 countries surveyed by the UN. This
ranking is same as that of the previous year. The
slight improvement in the score also helped Nepal to
escalate to the medium human development group
from the low human development group.
HDI of Nepal

The 2014 Nepal National Human Development Report had found
wide variations in HDI values across population groups in Nepal.
The Newar people have the highest HDI value, 0.565. Close on the
heels are Brahmins and Chhetris, with HDI value of 0.538. This
was followed by Janajatis, with HDI value of 0.482, Dalits HDI
value is 0.434 and Muslims HDI value is 0.422.
The variations in HDI values are even significant within these
groups, depending on where they live. The highest inequalities are
in education, and this may have pronounced long-term effects on
capabilities later in life.
HDI of Nepal

The Welcome to School Initiative, for instance, led to an
increase in net enrolment of 470,000 children, 57 percent of
them are girls, within a year of its implementation in 2005.
The programme primarily focused on girls and disadvantaged
groups. “Nepal’s policy on adolescent girls was initially
centered on health and education but now encompasses needs
in employment, various skills development and civic
participation.
HDI of Nepal

Nepal in HDIYears HDI scores
2000 0.446
2010 0.529
2011 0.538
2012 0.545
2013 0.551
2014 0.555
2015 0.558

Nepal status in HDI

HDI and its Components

Components Datas
Health Life expectancy at birth (years)
70.0
Education Expected years of schooling (years)
12.2
Income/composition of
resources
Gross national income (GNI) per capita (2011
PPP$)
2,337
Inequality Inequality-adjusted HDI (IHDI)
0.407
Gender Gender Development Index (GDI)
0.925
Poverty Multidimensional Poverty Index (MPI)
0.116
Work employment and
vulnerability
Multidimensional Poverty Index (MPI)
0.116

Human Security Homicide rate (per 100,000
people)
2.9
Trade and financial flow Exports and imports (% of GDP)
53.2
Mobility and communication Internet users (% of population)
17.6
Environment sustainability Carbon dioxide emissions per
capita (tonnes)
0.2
Demography Population, total (millions)
28.5

Efforts of HDI for human development
Universalism—from principles to practice

Reaching everyone—analytical and assessment
issues

 Caring for those left out—national policy options

 Transforming global institutions

UNDP in Nepal

The Sustainable Development Goals (SDGs), or known as the
Global Goals, are a universal call to action in order to end poverty,
protect the planet and ensure that all people enjoy peace and
prosperity.
These 17 Goals build on the successes of the Millennium
Development Goals, while including new areas such as climate
change, economic inequality, innovation, sustainable consumption,
peace and justice, among other priorities. The goals are
interconnected often the key to success on one will involve tackling
issues more commonly associated with another.
What are the sustainable development
goals?

HDI as the indicator of overall
Development
Schooling
Life expectancy
Measuring of standard of living
Per capita income

Limitations
Limited evaluation of human development.
HDI does not measures qualitative factors such as
cultural identity, gender opportunities.
Purchasing power parity value used to adjust GNI data
change quickly and can be inaccurate or misleading.
No replicate on quality of life factors, such as
empowerment movements or overall feelings of security.
Focuses on long term development without considering
nature and ecosystem.

Poverty
Poverty is a condition of having an insufficient resources
or income.in its most extreme form, poverty is a lack of
basic human needs such as adequate and nutritious food,
clothing housing, clean water and health services
Extreme poverty can cause terrible suffering and death and
even modest level of poverty can prevent people from
realizing many of their desires.

Causes And Effects Of Poverty
Causes of poverty
Overpopulation
Global distribution of resources
Inadequate education and employment
Economic and demographic trends
Welfare dependency

Effects of poverty
Malnutrition and starvation
Infectious disease
Mental illness and drugs dependency
Crime and violence
Illiteracy
Causes And Effects Of Poverty

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