Measuring Social and Economic DevelopmentMeasuring Social and

Economic Development

A Look at the Human Development Index (HDI)

Let’s look at our worldLet’s look at our world

• World Economic Information

• World Mapper

• World Economic Information

• World Mapper

Understanding IndexesUnderstanding Indexes

• What is an index?• An index is a composite of indicators that produces a

single calculation which can then be ranked.

• What is an index?• An index is a composite of indicators that produces a

single calculation which can then be ranked.

Let’s look at some examples!!

The Body Mass IndexThe Body Mass IndexClick here to calculate your

own body mass index.

The Wind Chill IndexThe Wind Chill Index

The Big Mac IndexThe Big Mac Index

Click here to watch a short informational video about

the “Big Mac Index”

Other Common IndexesOther Common Indexes

Click here to see the 2008 rankings

Click here to see the indicators that make up the index

Economic & Social IndexesEconomic & Social Indexes

• Economic and social indexes are like those we just talked about except they include economic and social data (such as income, educational attainment, health, etc.) rather than wind speeds, body weight, and the

like.

• Economic and social indexes are like those we just talked about except they include economic and social data (such as income, educational attainment, health, etc.) rather than wind speeds, body weight, and the

like.

The Human Development Index (HDI)

…is the best known composite index of social and economic well-being…

The Concept of Human Development

The Concept of Human Development

"The basic purpose of development is to enlarge people's choices. In principle, these choices can be infinite and can

change over time. People often value achievements that do not show up at all, or not immediately, in income or growth figures: greater access to knowledge, better nutrition and health services, more secure livelihoods, security against

crime and physical violence, satisfying leisure hours, political and cultural freedoms and sense of participation in community

activities. The objective of development is to create an enabling environment for people to enjoy long, healthy and

creative lives."

Mahbub ul Haq -- Founder of the Human Development Report

How the UNDP Measures Human Development

How the UNDP Measures Human Development

• The HDI consists of three equally weighted components:

• (1) “A long and healthy life” (Health)• (2) “Knowledge” (Education)• (3) “A decent standard of living” (Wealth)

• The HDI consists of three equally weighted components:

• (1) “A long and healthy life” (Health)• (2) “Knowledge” (Education)• (3) “A decent standard of living” (Wealth)

Deconstructing Each MeasureDeconstructing Each Measure

• Each component of the HDI is measured in the following way:

• Health• Measured by life expectancy at birth.• Education• Measured as a combination of adult

literacy (with two-thirds weight) and gross enrollment (with one-third weight).

• Wealth• Measured by GDP per capita.

• Each component of the HDI is measured in the following way:

• Health• Measured by life expectancy at birth.• Education• Measured as a combination of adult

literacy (with two-thirds weight) and gross enrollment (with one-third weight).

• Wealth• Measured by GDP per capita.

Calculating HDI:The United StatesCalculating HDI:

The United States

• In the United States, in 2012:• The average life expectancy was 78.7.• The adult literacy rate was 99%.• The mean years of schooling was 13.3%.• The GDP per capita was $43,480.• The HDI was .958.• The HDI ranking was 3rd.

• In the United States, in 2012:• The average life expectancy was 78.7.• The adult literacy rate was 99%.• The mean years of schooling was 13.3%.• The GDP per capita was $43,480.• The HDI was .958.• The HDI ranking was 3rd.

Click here to access an interactive HDI calculator.

The UNDP’s HDI Rankings 2012The UNDP’s HDI Rankings 2012

1  Norway 0.955 11 Canada 0.911

2 Australia 0.938 12

3 U. S. A. 0.937 13 Hong Kong 0.906

4 Netherlands 0.921 14 Iceland 0.906

5 Germany 0.920 15 Denmark 0.901

6 New Zealand 0.919 16 Israel 0.900

7 Ireland 0.916 17 Belgium 0.897

8 Sweden 0.916 18 Austria 0.895

9 Switzerland 0.913 19 Singapore 0.895

10 Japan 0.912 20 France 0.893

South Korea 0.909 Click here to access an interactive graph

which shows how some countries do better than others in turning income into education and health opportunities and therefore into

higher levels of human development.

Is the HDI Enough to Measure a Country’s Level of Development?Is the HDI Enough to Measure a

Country’s Level of Development?• According to the UNDP, the answer is: • “Not at all.” • “The concept of human development is much broader

than what can be captured in the HDI, or any other composite indices…”

• “The HDI and the other composite indices can only offer a broad proxy on some of the key the issues of human development…”

• “A fuller picture of a country's level of human development requires analysis of other human development indicators and information.”

• According to the UNDP, the answer is: • “Not at all.” • “The concept of human development is much broader

than what can be captured in the HDI, or any other composite indices…”

• “The HDI and the other composite indices can only offer a broad proxy on some of the key the issues of human development…”

• “A fuller picture of a country's level of human development requires analysis of other human development indicators and information.”

A Sampling of Other Development IndexesA Sampling of Other

Development Indexes

• The Economist’s “Quality of Life” Index• UNICEF’s “Child-Welfare” Index• The “Happy Planet” Index• The UNDP’s “Human Poverty Index”• The UNDP’s “Gender Empowerment

Measure”• International Living’s “Quality of Life” Index• The “Global Peace Index”• Freedom House’s “Freedom Rankings”

• The Economist’s “Quality of Life” Index• UNICEF’s “Child-Welfare” Index• The “Happy Planet” Index• The UNDP’s “Human Poverty Index”• The UNDP’s “Gender Empowerment

Measure”• International Living’s “Quality of Life” Index• The “Global Peace Index”• Freedom House’s “Freedom Rankings”

Three Issues to Consider When Evaluating

Indexes Like the HDI

Three Issues to Consider When Evaluating

Indexes Like the HDI

1) Validity

2) Reliability

3) Parsimony

1) Validity

2) Reliability

3) Parsimony

ValidityValidity

• What is the index supposed to measure?• What indicators make up the index?• Are these the best indicators for this index?• How are the indicators calculated? • Are there better ways to calculate these

indicators?• In short, how well does the index actually

measure what it is supposed to be measuring?

• What is the index supposed to measure?• What indicators make up the index?• Are these the best indicators for this index?• How are the indicators calculated? • Are there better ways to calculate these

indicators?• In short, how well does the index actually

measure what it is supposed to be measuring?

ReliabilityReliability

• Who or what organization collected the data?

• How were the data collected?

• In short, if you or someone else were to try to replicate the index would you end up with more or less the same results?

• Who or what organization collected the data?

• How were the data collected?

• In short, if you or someone else were to try to replicate the index would you end up with more or less the same results?

ParsimonyParsimony

• The whole point of an index is to simplify the measurement of a particular phenomenon.

• In short, does the index rely upon as few indicators as reasonably possible without undermining its validity?

• The whole point of an index is to simplify the measurement of a particular phenomenon.

• In short, does the index rely upon as few indicators as reasonably possible without undermining its validity?

Writing ExerciseWriting Exercise

• How would you define human development?

• Specifically, what indicators would you focus on if you were trying to measure human development?

• Would you measure human development differently than the Human Development Index (HDI)? Why or why not? Explain.

• How would you define human development?

• Specifically, what indicators would you focus on if you were trying to measure human development?

• Would you measure human development differently than the Human Development Index (HDI)? Why or why not? Explain.

What’s the Economy For, Anyway?

A Project of the Center for Communication and Civic Engagement

at the University of Washington.

What’s the Economy For, Anyway?

A Project of the Center for Communication and Civic Engagement

at the University of Washington.