Development indicators
Gianni Vaggi and Clara Capelli
University of Pavia November 2013
The Human Development Index
1990 Human Development Report (Mahbub Ul Haq, Amartya Sen et al)
Development goes beyond economic growth, encompassing human
well-being: Human development is a process of enlarging people’s
choices.;
The term human development denotes both the process of widening
people’s choices and the level of their achieved well-being:
Deprivation in income;
Deprivation in life expectancy;
Deprivation in literacy.
Focus on the formation of the capabilities and their use.
Economia dello Sviluppo
Three dimensions
Health and Longevity: Life expectancy Index
Knowledge and Education: Education Index
Standard of living:
Income Index.
Economia dello Sviluppo
How to calculate it/Before 2010
• Life expectancy at birth;
• Adult literacy rate (2/3) and the combination of primary,
secondary, and tertiary gross enrollment ratios (1/3);
• Natural Logarithm of GDP per capita at PPP.
Economia dello Sviluppo
How to calculate it/Before 2010
Economia dello Sviluppo
Source: HD Report, 2007/8
How to calculate it/After 2010
• Life expectancy at birth;
• Mean years of schooling and expected years
of schooling;
• Natural Logarithm of GNI per capita at PPP.
Source: HD Report, 2010
Economia dello Sviluppo
How to calculate it/After 2010
Economia dello Sviluppo
Source: HD Report, 2011
Economia dello Sviluppo
Human Development Index
Why these changes?
Indicators for education were regarded as not that informative;
GNI is more accurate, as it includes international flows and excludes
income generated domestically but repatriated abroad;
The geometric mean accounts for difference in achievement across
dimensions, reducing the level of substitutability between dimensions
and ensuring that a x-percent change in one index has the same
impact on the HDI, regardless to the index.
Aren’t you convinced?
LEI = 0.3 ; EI = 0.3 ; II = 0.8
Arithmetic Average = 0.467;
Geometric Mean = 0.416;
Change of 10% in the income index (it gets 0.88):
Arithmetic Average = 0.493 (+5.57%);
Geometric Mean = 0.429 (+3.125%).
Change of 10% in the life education index (it gets 0.33):
Arithmetic Average = 0.477 (+2.14%);
Geometric Mean = 0.429 (+3.125%).
Economia dello Sviluppo
Source: HD Report, 2011
Source: HD Report, 2013
Very high HDI
1
2
3
4
5
6
7
8
9
10
Source: HD Report, 2013
Norway
Australia
USA
Netherlands
Germany
New Zealand
Ireland
Sweden
Switzerland
Japan
0.955
0.938
0.937
0.921
0.92
0.919
0.916
0.916
0.913
0.912
Low HDI
1
2
3
4
5
6
7
8
9
10
Source: HD Report, 2013
Gambia
Djibouti
Zambia
Uganda
Haiti
Yemen
Togo
Lesotho
Nepal
Papua New Guinea
0.439
0.445
0.448
0.456
0.456
0.458
0.459
0.461
0.463
0.466
1980
55
57
59
71
76
85
101
112
114
121
135
136
145
186
Russia
Saudi Arabia
Cuba
Venezuela
Iran
Brazil
China
Egypt
Philippines
Indonesia
Ghana
India
Kenya
RDC
0.575
0.626
0.629
0.443
0.522
0.407
0.407
0.561
0.422
0.391
0.345
0.424
0.286
1990
0.730
0.653
0.681
0.635
0.540
0.590
0.495
0.502
0.581
0.479
0.427
0.410
0.463
0.297
2000
0.713
0.717
0.690
0.662
0.654
0.669
0.590
0.593
0.610
0.540
0.461
0.463
0.447
0.234
2005
0.753
0.748
0.735
0.694
0.685
0.699
0.637
0.625
0.630
0.575
0.491
0.507
0.472
0.258
Source: HD Report, 2012
Economia dello Sviluppo
2010
0.782
0.777
0.775
0.744
0.740
0.726
0.689
0.661
0.649
0.620
0.540
0.547
0.511
0.295
2012
0.788
0.782
0.780
0.748
0.742
0.730
0.699
0.662
0.654
0.629
0.558
0.554
0.519
0.304
Source: HD Report, 2013
Source: HD Report, 2013
Source: HD Report, 2013
HDI vs GDP
HDI vs GDP
HDI and GDP per capita
1.2
1
0.8
0.6
0.4
0.2
0
Human Development Index
GDP per capita index (PPP)
Source: HD Report, 2013
The Human Development Index
Source: HD Report, 2013
Some Criticisms
The environmental issue is completed overlooked;
National focus which neglects the "global" perspective;
Only material aspects of life: what about human rights, freedom,
gender equality;
Debatable comparability along time.
Other Indices from the HDR
The Human Poverty Index for developing countries (HPI-1);
The Gender-Related Development Index (GDI);
The Gender Empowerment Measure (GEM);
Inequality-adjusted HDI (IHDI);
Gender Inequality Index (GII);
Multidimensional Poverty Index (MPI).
Other Indices
Happy Planet Index (HPI);
Gross National Index (GNH);
Living Planet Index (LPI);
Physical Quality of Life Index (PQLI);
Genuine Progress Indicator (GPI).
Other reports
Stiglitz, J., Sen, A., Fitoussi, JP. (2008), Report by the Commission on the Measurement
of Economic Performance and Social Progress.
Alkire, S., Roche, J.M. and Seth, S. (2013) Multidimensional Poverty Index 2013,
www.ophi.org.
Helliwell, J., Layard, R. and Sachs, J. (2013), World Happiness Report 2013, New York,
Earth Institute.
UNU-IHDP and UNEP, Inclusive Wealth Report 2012. Measuring progress towards
sustainability, Cambridge University Press, Cambridge.
Source: HD Report, 2013
Economia dello Sviluppo
Source: HD Report, 2013
Economia dello Sviluppo