13 August 2013

Definition
The Human Development Index (HDI) is a composite statistic of life expectancy, education, and income indices used to rank countries into four tiers of human development. It was created by the Pakistani economist
Mahbub ul Haq and the Indian economist Amartya Sen in 1990
4 Tiers are: Very High, High, Medium and Low
New method (2010 Report onwards)
Published on 4 November 2010 (and updated on 10 June 2011), starting with the 2010 Human Development Report the HDI combines three dimensions: Health, Education and Income
In its 2010 Human Development Report, the UNDP began using a new method of calculating the HDI

The first Human Development Report introduced a new way of measuring development by combining indicators of life expectancy, educational attainment and income into a composite human development index, the HDI
The breakthrough for the HDI was the creation of a single statistic which was to serve as a frame of reference for both social and economic development
The HDI sets a minimum and a maximum for each dimension, called goalposts, and then shows where each country stands in relation to these goalposts, expressed as a value between 0 and 1

The education component of the HDI is now measured by mean of years of schooling for adults aged 25 years and expected years of schooling for children of school entering age
Mean years of schooling is estimated based on educational attainment data from censuses and surveys available in the UNESCO Institute for Statistics database
Expected years of schooling estimates are based on enrolment by age at all levels of education and population of official school age for each level of education. Expected years of schooling is capped at 18 years
The indicators are normalized using a minimum value of zero and maximum values are set to the actual observed maximum value of mean years of schooling from the countries in the time series, 1980 –2012, that is 13.3 years estimated for the United States in 2010. Expected years of schooling is maximized by its cap at 18 years. The education index is the geometric mean of two indices

Aggregate income of an economy generated by its production and its ownership of factors of production, less the incomes paid for the use of factors of production owned by the rest of the world, converted to international dollars using purchasing power parity (PPP) rates, divided by midyear population
Based on implied PPP conversion factors from IMF (2012)
Based on projected growth rates by the Asian Development Bank
(2012)

Contd.
PPP estimate based on cross-country regression; projected growth rate based on ECLAC (2012) and UNDESA (2012c) projected growth rates
Based on UNESCWA (2012) and UNDESA (2012) projected growth rates
Based on an unpublished estimate of the PPP conversion rate from the World Bank and projected growth rates from UNESCWA (2012) and UNDESA (2012)
Based on projected growth rates from UNDESA(2012)
Based on ADB (2011) and UNDESA (2011) projected growth rates
Based on PPP data from IMF (2012)

The 21st century is witnessing a profound shift in global dynamics, driven by the fast-rising new powers of the developing world. China has overtaken Japan as the world’s second biggest economy, lifting hundreds of millions of people out of poverty in the process
India is reshaping its future with new entrepreneurial creativity and social policy innovation. Brazil is raising its living standards by expanding international relationships and antipoverty programmes that are emulated worldwide
But the “Rise of the South” is a much larger phenomenon. Indonesia,
Mexico, South Africa, Thailand, Turkey and other developing countries are becoming leading actors on the world stage. The 2013 Human
Development Report identifies more than 40 developing countries that have done better than expected in human development in recent decades, with their progress accelerating markedly over the past 10 years

Data refer to the most recent year available during the period specified
Data refer to 2013 or the most recent year available for
HDR2014
United Nations Educational, Scientific and Cultural
Organization Institute for Statistics (UIS) estimate derived from its Global Age-specific Literacy Projections Model, which is based on national data since 2000

Not all indicators were available for all countries; caution should thus be used in cross-country comparisons. Where data are missing, indicator weights are adjusted to total 100 percent.
Estimates have been computed to ensure comparability across countries; thus they are not necessarily the same as official statistics of the countries, which may use alternative rigorous methods
Data are rounded according to the following scheme: less than 100, no rounding; 100 –999, rounded to the nearest 10; and greater than
1,000, rounded to the nearest 100
Projections based on medium-fertility variant

The human development data utilized in the preparation of the Human Development Index (HDI) and other composite indices featured in the Human Development
Report are provided by a variety of public international sources and represent the best and most current statistics available for those indicators at the time of the preparation of this annual report
Calculations of HDI values and country rankings are the sole responsibility of the Human Development Report
Office

The aim of the Human Development Report is to stimulate global, regional and national policy discussions on issues that are relevant to human development
To be of relevance, the data in the Report requires the highest standards of data quality, consistency, transparency and accountability

Contd.
Several steps are taken each year to ensure that the Report maintains high quality and reliability
These steps include partnering with many national and international statistical agencies
Sources are often specialized agencies of the United Nations system working on issues such as:
- Health —World Health Organization (WHO)
- Education —United Nations Education Scientific and Cultural
Organization (UNESCO) Institute for Statistics (UIS)
- Income – World Bank, ADB, IMF, ECLAC, UNESCWA etc.

Contd.
Several mechanisms have also been adopted by the Human
Development Report Office (HDRO) to ensure that the data they publish is of high quality and relevance
In addition to the small in-house team of qualified statisticians, a Senior
Statistical Advisor reviews all of HDRO's statistical work. This process is supplemented by consultations with a standing Statistical Advisory
Panel (SAP)
A selected group of distinguished national, international professionals and selected UNSC members participate in the Advisory Panel while the peer review process is done through leading regional and national statistical offices as well as international organizations

The process of data compilation is a bit complex
Highly professional statisticians and group of experts are involved in this process
In some of the indicators they use NSO data, while some of the indicators are computed using rigorous method which may not be same as official statistics
The forum is still working to find more technical issues in support of the published indicators