The UN Human Development Index (HDI) is a multidimensional measure of the economic development of an economy.
The HDI is an index combining:
1) Income. Measured by GDP per capita at Purchasing Power Parity (PPP), what the average citizen can afford. 2) Health. Measured by life expectancy at birth. 3) Education. Measured by the adult literacy rate and educational enrolment rates.
The HDI measures a mix of income, health and education. These three measures are given equal weighting. The HDI lies between 0 and 1. A country is more developed the higher its HDI score is.
Alternative Measures of Development Alternative measures of development include: – Access to clean water and energy consumption per capita. Clean water is necessary for basic human survival, good health and to prevent diseases. Energy consumption is required for transport, heating and lighting, it helps increase living standards. However, more energy consumption could mean more pollution, this damages health and future generations. – Percentage of adult males in agriculture. As GDP rises, this measure should fall because agricultural labour is replaced with tractors and combine harvesters. Also, adult males should move to cities to get higher paid jobs in the manufacture and service sectors. – Primary and secondary educational enrolment rates. Education increases human capital so wages rise, people can consume more and poverty falls. Also, education gives people individual freedoms like the ability to read and fill in forms. – Access to phones per 1,000 of the population. Access to communication gives people individual freedoms and makes it easier to buy and sell goods.
However, many of these measures will overlap for example, a lot of energy consumption may be caused by a lot of male workers in the manufacture sector. Also, there may be data collection problems, it may be very hard to get data (how would you get data on a farmer’s energy consumption?). Moreover, data may be inaccurate so the measures could be misleading