1 indicates a high level of economic development, 0 a very low level.
The HDI combines:
- Life Expectancy Index. Average life expectancy compared to a global expected life expectancy..
- Education Index
- mean years of schooling
- expected years of schooling
- Income Index (GNI at PPP)
What the HDI shows.
- The HDI give an overall index of economic development. It has some limitations and excludes several factors that might have been included, but it does give a rough ability to make comparisons on issues of economic welfare – much more than just using GDP statistics show.
Limitations of Human Development Index
- Wide divergence within countries. For example, countries like China and Kenya have widely different HDI scores depending on the region in question. (e.g. north China poorer than south east)
- HDI reflect long-term changes (e.g. life expectancy) and may not respond to recent short-term changes.
- Higher National wealth GNI may not necessarily increase economic welfare, it depends how it is spent.
- Also higher GNI per capita may hide widespread inequality within a country. Some countries with higher real GNI per capita have high levels of inequality (e.g. Russia, Saudi Arabia)
- However, HDI can highlight countries with similar GNI per capita but different levels of economic development.
- Economic welfare depends on several other factors, such as – threat of war, levels of pollution, access to clean drinking water e.t.c.
