Human Development Index - An elaborate means of evaluating a country’s HD


Seminar Paper, 2004

33 Pages, Grade: 1.00


Excerpt

Contents

1. Introduction

2. What is the human development index (HDI)?
2.1 Background of the HDI
2.2 Five criteria for the HDI measures
2.2.1 Simplicity
2.2.2 Universality
2.2.3 Sufficient attractiveness
2.2.4 Pluralism
2.2.5 Synthesis

3. Components of the HDI
3.1 Life Expectancy
3.2 Education Index
3.2.1 Functional Literacy Rate
3.2.2 Combined Elementary and Secondary Enrolment Rates
3.3 Income Index
3.4 Indicators Used in the Estimation of the HDI
3.4.1 health as measured by life expectancy
3.4.2 Level of knowledge and skills
3.4.2.1 Combined Enrolment Rate
3.4.2.2 Net Enrolment Rate
3.4.3 Real Per Capita Income
3.6 Fixed minimum and maximum values
3.7 HDI values

4. The New HDI
4.1 Methodological changes
4.2 New and improved data series

5. A comparative Case Study: Norway versus Canada

6. Common failings of the HDI
6.1 Regions and Districts
6.2 Ethic Groups
6.3 Gender

7. The HDI in comparison
7.1 Economic Growth
7.2 Human Capita Formation
7.3 Basic Need Approach
7.4 HDI
7.3.1 HDI achievements

8. Discussion part

9. Conclusion

Bibliography

Appendix

List of Figures

Figure 1: The Three Dimensions

Figure 2: Income discounting under the old and the new formulas

Figure 3: Changes in HDI ranks due to revisions of data and methodology

1. Introduction

Why was an index like the Human Development Index (HDI) established in the first place? That question and what the HDI really is about is the topic of this paper. The aim is to highlight its uniqueness and show how it differentiates from other measurement tools of human development.

This assignment was done with secondary research only. For a topic that young there are efficient internet sources available which were sufficient enough to complete the assignment based on the oral presentation.

In the following the background for creating the HDI will be explained, the five criteria that were needed for coming up with the components of the HDI, namely the life expectancy index, the educational index, and the income index. Also the new HDI will be explained, common failings of the HDI in general, and end by the HDI in comparison.

To give a notion of the HDI: The idea was to have a means to measure an overall development in Human Development by not only looking at the GDP but also at literacy and the life expectancy at birth. The HDI is a simple average of the life expectancy index, educational attainment index and adjusted real GDP per capita (PPP$) index, and is derived by dividing the sum if these three indices by 3 for 174 countries.[1]

Human development, is a process of enlarging people’s choices, most critical of which are to lead a long and healthy life, to be educated and to enjoy a decent standard of living. The Human Development Index (HDI) conceptualized by the UNDP in 1990 attempts to measure human development. Recognizing the complexity of human development, the HDI may not be that comprehensive to be able to capture all the facets of human development. The UNDP, however, stressed that a simple composite measure of human development can already draw attention to the issues quite effectively.[2]

2. What is the human development index (HDI)?

The HDI – human development index – is a summary composite index that measures a country's average achievements in three basic aspects of human development: longevity, knowledge, and a decent standard of living. Longevity is measured by life expectancy at birth; knowledge is measured by a combination of the adult literacy rate and the combined primary, secondary, and tertiary gross enrolment ratio; and standard of living by GDP per capita (PPP US$).[3]

2.1 Background of the HDI

When scholars were looking into developing the HDI a lot of skepticism filled the discussions. As one of the driving forces behind the HDI, Nobel Laureate Prof. Amartya Sen, said, “I had expressed […] considerable skepticism about trying to focus on a crude index of this kind, attempting to catch in one simple number a complex reality human development and human deprivation”[4].

But despite the concerns that a simple index doesn’t do justice to such complex facts, it was fairly fast agreed that the HDI is a much better means to evaluate a country’s HD than just looking at the GDP.

The HDI was first introduced in 1990 and it was neither thought of its ongoing duration nor its impact for looking at a country’s situation.[5] Over the years a constant refinement has been going on – mostly concerning the collection of data but also methodological changes. (See “The New HDI”)

2.2 Five criteria for the HDI measures

Before it was agreed on the actual measurement indices – longevity, acquirement of knowledge, standard of living – a few criteria were thought of that should be taken into consideration for computing the HDI.

2.2.1 Simplicity

Simplicity was one of the criteria because only if an index is simple and easy to understand it is broadly applicable.

2.2.2 Universality

Universality was the second claim for the HDI – the measured outcome by an index should work for both developing and developed countries and not only be tailored to either one.

2.2.3 Sufficient attractiveness

The HDI should also have a sufficient attractiveness since without drawing the attention of policy makers, academics and other relevant actors to it, such an index wouldn’t make sense in the first place.

2.2.4 Pluralism

Moreover the focus should be on Pluralism and not mono-centricity.

2.2.5 Synthesis

At last it should be a synthesis with an attention on the most important information within the latitude of human development.[6]

Having formulated the expectations for the HDI, the three indices were come up with.

3. Components of the HDI

It has to be emphasized that data limitations really do pose constraints on estimating the HDI. Within each component index, there may already be data limitations and one who is estimating the HDI may have more than one way in addressing the constraint. It may be through some modeling techniques, use of proxy indicators, or by using assumptions based on some studies. Other techniques may also exist but the choice of strategy really depends on the estimator.

For this report, the NSCB still used the same methodology used in the 1997 report as described above, except for revisions in the life expectancy and education indices as new data became available. It should also be noted that in 1997, the province of Kalinga-Apayao was split into Kalinga and Apayao. Thus, for 1997 and 2000, separate indices were computed for them. The proceeding discussions elaborate the data sources and data limitations in the computation of the life expectancy, education and income indices for 2000.

3.1 Life Expectancy

In the previous 1997 report, the life expectancy figures for 1994 and 1997 were estimated using the results of the study of Cabigon and Flieger, 1999. For this report, the life expectancy figures disaggregated by sex were taken from the 1995 Census-Based National, Regional and Provincial Population Projections of the National Statistics Office (NSO) to estimate life expectancy index for 1994, 1997 and 2000. Consequently, the life expectancy index for 1994 and 1997 were revised. For 1994, however, the life expectancy figures used were those of 1995.

The 1994 population was estimated using the computed 1990-1995 annual average growth rate of NSO available at the regional and provincial levels and the household population of the 1995 Census of Population.

On the other hand, the 1997 population was obtained from the 1995 Census-Based Regional and Provincial Population Projections while the 2000 household population was obtained from the 2000 Census of Population. However, since disaggregation by sex of the 2000 Census of Population is not yet available for all provinces, the sex disaggregation structure of the household population in the 1995 Census of Population was used.

3.2 Education Index

3.2.1 Functional Literacy Rate

The source of the functional literacy rates used was the Functional Literacy, Education and Mass Media Survey (FLEMMS) conducted by the National Statistics Office (NSO) in 1994. Since then, no updates have been made on the rates. Thus, using the same literacy rates in this report is already a limitation in the estimation. Through the years, with the increase in the enrolment rate in the country, the functional literacy rates may have already improved to some extent. Thus, using the outdated rates there may be source of underestimation in the education index.

3.2.2 Combined Elementary and Secondary Enrolment Rates

The elementary and secondary enrolment rates were sourced from the Department of Education (DepEd). Due to non-availability of data for the SY 2000-2001, the enrolment figures used in this report are for SY 1999-2000. Thus, this poses another limitation on the computation of the HDI. With the increasing trend present in Philippine enrolment figures, using the SY 1999-2000 data may be a source of underestimation of the education index and consequently, the HDI.

Also, there was the need to revise the 1994 and 1997 education index to reflect SIARGAO, a municipality in Surigao del Norte; and to include Marawi City in Lanao del Sur and Cotabato City in Maguindanao.

3.3 Income Index

Data used for income was the average per capita income from the 1994, 1997 and 2000 Family Income and Expenditure Survey (FIES) conducted every three years by the NSO. This income was deflated using the provincial Consumer Price Index (1994=100) that was also sourced from the NSO.[7]

Figure 1: The Three Dimensions Abbildung in dieser Leseprobe nicht enthalten

As this graph by the UNDP shows, a long and healthy life, knowledge and a decent standard of living were the key dimensions for computing the HDI. From those dimensions the indicators were developed – namely the life expectancy at birth (life expectancy index), adult literacy rate and gross enrolment ratio (together education index) and the GDP per capita (GDP index).[8]

3.4 Indicators Used in the Estimation of the HDI

The provincial HDI is constructed using the average of three development outcomes for each province. These include:[9][10]

3.4.1 Health as measured by life expectancy

Life Expectancy – refers to the average number of years a person is expected to live from the time of his/her birth; also referred to as life expectancy at birth.

3.4.2 Level of knowledge and skills

Level of knowledge and skills as measured by the weighted average of functional literacy

Functional Literacy – represents a significantly higher level of literacy that includes reading, writing, and numeracy skills. These skills must be sufficiently advanced to enable the individual to participate fully and effectively in activities commonly occurring in his life situation that require a reasonable capability beyond oral and written communication.

3.4.2.1 Combined Enrolment Rate

Combined Enrolment Rate derived in this report as the ratio of the sum of elementary and secondary enrolment in the corresponding age group that should be enrolled at those levels to the sum of corresponding school age population.

3.4.2.2 Net Enrolment Rate

Net Enrolment Rate pertains to the ratio in a given year of enrolment at a given level of education in the age group which should be enrolled at that level to the corresponding population; also referred to as a participation rate.

and access to resources as measured by the level of real per capita income.

3.4.3 Real Per Capita Income

Real Per Capita Income derived by deflating the average per capita income data generated from the Family Income and Expenditures Survey (FIES) using the corresponding provincial consumer price index with 1994 as the base year.

3.5 Source of the data for the HDI
Currently, for various reasons, there still exist many data gaps in even some very basic areas of human development indicators. While advocating actively for the improvement of human development data, as a principle and for practical reasons, HDRO does not collect data directly from countries or make estimates to fill these data gaps in the Report.

The one exception is the human development index (HDI). The Human Development Report Office strives to include as many UN member countries as possible in the HDI. For a country to be included, data ideally should be available from the relevant international data agencies for all four components of the index (the primary sources of data are the United Nations Population Division for life expectancy at birth, the

UNESCO Institute for Statistics for the adult literacy rate and combined primary,

secondary and tertiary gross enrolment ratio and the World Bank for GDP per capita [PPP US$]). But for a significant number of countries data are missing for one or more of these components.

In response to the desire of countries to be included in the HDI, the Human Development Report Office makes every effort in these cases to identify other reasonable estimates, working with international data agencies, the UN Regional Commissions, national statistical offices and UNDP country offices. In a few cases the Human Development Report Office has attempted to make an estimate in consultation with regional and national statistical offices or other experts.[11]

3.6 Fixed minimum and maximum values

In order to compute each index, information about the fixed minimum and maximum are necessary. When looking at longevity, adequate nutrition and a good health are as factors implied. The fixed minimum for the life expectancy at birth is 25 years and the maximum is 85. In Germany the life expectancy at birth is for instance 77 years whereas it is only 69 years in Turkey.

The fixed rates for adult literacy reach from 0% to 100%. In Germany the adult literacy rate lies at 99% whereas in Turkey it is only at 83%.

For the index of Standard of Living the fixed minimum lies at $100 and the maximum at $40000 (PPP$).[12]

[...]


[1] UNDP (1999)

[2] nscb (2003)

[3] UNDP, (2003)

[4] Jahan, (2001)

[5] Jahan, (2001)

[6] Jahan, (2001)

[7] nscb, (2001)

[8] UNDP, (2003)

[9] nscb, (2001)

[10] nscb, (2001)

[11] UNDP, (2003)

[12] UNDP, (1999)

Excerpt out of 33 pages

Details

Title
Human Development Index - An elaborate means of evaluating a country’s HD
College
University of Hamburg
Course
Programm: MIBA
Grade
1.00
Author
Year
2004
Pages
33
Catalog Number
V62262
ISBN (eBook)
9783638555340
ISBN (Book)
9783638736619
File size
798 KB
Language
English
Notes
Why was an index like the Human Development Index (HDI) established in the first place? That question and what the HDI really is about is the topic of this paper. The aim is to highlight its uniqueness and show how it differentiates from other measurement tools of human development. This assignment was done with secondary research only. For a topic that young there are efficient internet sources available which were sufficient enough to complete the assignment based on the oral presentation.
Tags
Human, Development, Index, Programm, MIBA
Quote paper
Robert Nagel (Author), 2004, Human Development Index - An elaborate means of evaluating a country’s HD, Munich, GRIN Verlag, https://www.grin.com/document/62262

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