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New method of calculation of Human Development Index (HDI)


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This article describes the method to calculate new Human Development Index. The article provides the goalposts set for the composite indices in order to calculate HDI. It gives information regarding calculation of Life Expectancy Index (LEI), Education Index (EI) and Income Index (II).



Human Development Index (HDI)


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.


Read more articles related to Human Development Index (HDI).

Difference between old and new calculation methods of Human Development Index (HDI).
Old method of Human Development Index (HDI) calculation prior to 2010.
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