Topic > The importance of the Human Development Index in...

Human Development IndexIncome is not the only way to calculate a person's well-being. The HDI (human development index) was created to better calculate the quality of life. The Human Development Index is divided into 3 parts: GDP per capita, life expectancy, and various measures of education such as school enrollment and literacy rate (“Human Development Index, n.d.”). Each part varies from 0 to 1, where 0 represents the lowest level of development and 1 the highest level, and a country's score is represented by the percentage value obtained. By averaging the 3 parts we obtain the HDI. Therefore, quality of life is measured rather than per capita income; this represents the strength of the Human Development Index (“Human Development Index, n.d.”). The first human development report was published in 1990. The main creators of the human development index are Pakistani economist Mahbub ul Haq and Nobel laureate Amartya Sen (Briney, 2013). They thought that this index had the potential to change the focus of public decisions from a concentration on economic to human well-being (“Human Development Information”). The Human Development Index is a statistic superior to GDP for calculating the well-being of the population. The HDI takes into account many characteristics that calculate people's standard of living. GDP per capita is a generalization, because a small group of very wealthy people can make this statistic seem artificially high (“How does HDI relate to large-scale retail trade? (n.d.)”). In a situation where HDI is greater than GDP, this reveals how a country's development has taken precedence in terms of earnings. This can provide the nation with the development needed for optimal growth, which would allow development to be sustained as growth continues (“Human Development Information”). When GDP is greater than HDI it reveals how production has taken the place of population development. Due to reduced investment in education and healthcare, access to these services may be more limited. Simply because the money is reinvested in the economy for economic growth instead of being used to increase the general well-being of the population (How does HDI relate to GDO? (n.d.)). The Human Development Index was traditionally measured using a set of fixed minimum and maximum values ​​for life expectancy, knowledge and education measured by the adult literacy rate with the combination of the gross enrollment ratio of primary, secondary and tertiary and standard of living (Noorbakhsh, 1998).