Development Indicators That Are Used To Calculate Hdi

An interactive tool to understand the core development indicators that are used to calculate HDI.

Calculate HDI

What is the Human Development Index (HDI)?

The Human Development Index (HDI) is a composite statistic used to rank countries by their level of “human development”. It was created by the United Nations Development Programme (UNDP) to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. The Human Development Index (HDI) provides a broader perspective on well-being than purely economic measures like Gross Domestic Product (GDP).

This index is particularly useful for policymakers, development agencies, researchers, and anyone interested in understanding the multifaceted nature of development. It helps to question national policy choices and understand why two countries with similar GNI per capita can have vastly different human development outcomes. A common misconception is that the Human Development Index (HDI) only measures a country’s wealth; in reality, it provides a balanced view by incorporating health and education as equally important dimensions.

Human Development Index (HDI) Formula and Mathematical Explanation

The Human Development Index (HDI) is calculated as the geometric mean (the cube root) of three normalized dimension indices: the Life Expectancy Index, the Education Index, and the Income Index. This method ensures that a poor performance in any one dimension is not fully compensated for by a high performance in another.

The formula is: HDI = (LEI * EI * II) ^ (1/3)

Step 1: Life Expectancy Index (LEI)

This index measures the ability to live a long and healthy life. It is normalized using a minimum value of 20 years and a maximum of 85 years.

Formula: LEI = (Life Expectancy - 20) / (85 - 20)

Step 2: Education Index (EI)

The Education Index is the average of two sub-indices: Mean Years of Schooling and Expected Years of Schooling. This captures both the current educational attainment of the adult population and the future potential for the younger generation.

• Mean Years of Schooling Index (MYSI): MYS / 15 (Goalpost is 15 years)
• Expected Years of Schooling Index (EYSI): EYS / 18 (Goalpost is 18 years)

Formula: EI = (MYSI + EYSI) / 2

Step 3: Income Index (II)

To measure a decent standard of living, the HDI uses Gross National Income (GNI) per capita, adjusted for purchasing power parity (PPP). The formula uses the natural logarithm because income’s contribution to human development diminishes as it increases. The goalposts are $100 and $75,000.

Formula: II = (ln(GNIpc) - ln(100)) / (ln(75000) - ln(100))

Variables used in the Human Development Index (HDI) calculation.

Variable	Meaning	Unit	Typical Range
Life Expectancy	Average years a person is expected to live	Years	50 – 85
Expected Schooling	Years of schooling a child can expect to receive	Years	5 – 18
Mean Schooling	Average years of schooling for adults 25+	Years	1 – 15
GNI per Capita	Gross National Income per person (PPP)	$ (PPP)	500 – 75,000

Practical Examples

Example 1: A Country with Very High Human Development

• Inputs: Life Expectancy = 83 years, Expected Schooling = 18 years, Mean Schooling = 14 years, GNI per Capita = $65,000
• Calculation:
  • LEI = (83 – 20) / (85 – 20) = 0.969
  • EI = ((18/18) + (14/15)) / 2 = 0.967
  • II = (ln(65000) – ln(100)) / (ln(75000) – ln(100)) = 0.985
  • Human Development Index (HDI) = (0.969 * 0.967 * 0.985)^(1/3) = 0.974
• Interpretation: An HDI of 0.974 signifies a very high level of human development, with excellent outcomes in health, education, and standard of living.

Example 2: A Country with Medium Human Development

• Inputs: Life Expectancy = 68 years, Expected Schooling = 12 years, Mean Schooling = 7 years, GNI per Capita = $8,000
• Calculation:
  • LEI = (68 – 20) / (85 – 20) = 0.738
  • EI = ((12/18) + (7/15)) / 2 = 0.567
  • II = (ln(8000) – ln(100)) / (ln(75000) – ln(100)) = 0.665
  • Human Development Index (HDI) = (0.738 * 0.567 * 0.665)^(1/3) = 0.653
• Interpretation: An HDI of 0.653 places the country in the medium human development category, indicating there are significant opportunities for improvement across all three dimensions.

How to Use This Human Development Index (HDI) Calculator

1. Enter Life Expectancy: Input the average life expectancy at birth for the country or region.
2. Provide Education Data: Fill in both the “Expected Years of Schooling” for children and the “Mean Years of Schooling” for the adult population.
3. Input GNI per Capita: Enter the Gross National Income per capita, adjusted for purchasing power parity (PPP $).
4. Review the Results: The calculator will instantly update, showing the final Human Development Index (HDI) value. You can also see the three intermediate dimension indices (LEI, EI, II) to understand which factors are driving the score. The bar chart provides a visual comparison of the components.
5. Make Decisions: Policymakers can use this to identify areas needing investment. A low Education Index, for instance, might prompt reforms in the education system.

Key Factors That Affect Human Development Index (HDI) Results

The Human Development Index (HDI) is influenced by a wide range of underlying factors. Understanding these drivers is key to formulating policies that foster human development.

• Healthcare Systems and Policies: The quality, accessibility, and affordability of healthcare directly impact life expectancy. Countries with universal healthcare and strong public health initiatives tend to have a higher Life Expectancy Index.
• Education Policies: Government investment in education, teacher quality, and access to schooling for all, from primary to tertiary levels, is crucial. This directly affects both mean and expected years of schooling. Find out more about the Education Index.
• Economic Growth and Stability: A stable and growing economy generally leads to a higher GNI per capita, which boosts the Income Index. However, the Human Development Index (HDI) shows that economic growth alone isn’t enough if it doesn’t translate into better lives for people.
• Gender Equality: Societies where women and girls have equal access to education and economic opportunities often show higher overall HDI scores. Gender inequality can significantly hold back a country’s development potential. Learn more about the Gender Development Index.
• Political Stability and Governance: Good governance, low corruption, and political stability create an environment where human development can flourish. In contrast, conflict and instability can devastate health and education systems. See how this is measured with the Augmented Human Development Index.
• Environmental Quality: Access to clean water, air quality, and sanitation affects health outcomes and, consequently, life expectancy. Environmental degradation can pose significant risks to human well-being.

Frequently Asked Questions (FAQ)

1. What is considered a “good” Human Development Index (HDI) score?

The UNDP classifies countries into four tiers: Very High (0.800 and above), High (0.700–0.799), Medium (0.550–0.699), and Low (below 0.550). A score above 0.800 is generally considered a sign of very high human development.

2. Why does the Human Development Index (HDI) use a geometric mean?

A geometric mean is used to ensure that a low score in one dimension is not fully compensated for by a high score in another. It penalizes unbalanced development, emphasizing the need for progress across all three areas—health, education, and income—simultaneously.

3. What are the limitations of the Human Development Index (HDI)?

The HDI is a summary measure and does not account for inequality within countries, poverty, human security, or empowerment. For this reason, the UNDP also publishes other indices like the Inequality-adjusted HDI (IHDI) to provide a more complete picture.

4. How is the Human Development Index (HDI) different from GDP?

GDP (Gross Domestic Product) measures the total economic output of a country. The Human Development Index (HDI) is much broader, incorporating health and education outcomes alongside economic prosperity to give a more holistic view of a country’s development.

5. Why is income measured using a logarithm in the Human Development Index (HDI)?

The logarithm is used to reflect the diminishing importance of income as it increases. The difference in well-being gained from an extra $1,000 is much greater for a poor person than for a very wealthy person. The log transformation accounts for this reality.

6. Can the Human Development Index (HDI) be used to compare sub-national regions?

Yes, the HDI methodology can be applied at the sub-national level (e.g., states, provinces) provided that the necessary data (life expectancy, education, income) is available for those regions. This can reveal internal disparities within a country.

7. Where can I find official Human Development Index (HDI) data?

The most reliable source for official data is the annual Human Development Report published by the United Nations Development Programme (UNDP). Their website provides access to the reports and underlying data. More information can be found on our Life Expectancy Calculator.

8. Has the Human Development Index (HDI) formula ever changed?

Yes. Prior to 2010, the formula used an arithmetic mean and different indicators for education (adult literacy and gross enrollment ratio). The current formula, using a geometric mean and new education indicators, was introduced to better reflect the nuances of human development.