The Body Mass Index (BMI) measures the relationship between a person’s height and weight. Click on the image to the left to go to a website which will calculate your body mass index for you.
The Wind Chill Index measures the relationship between air temperature and wind speed.
The Big Mac Index measures the relationship between exchange rate and purchasing power parity. Those countries where the price of a big mac is more than in the U.S. (adjusting for exchange rate) are considered to have overvalued currencies, while those countries where the price of a big mac is less than in the U.S. (adjusting for exchange rate) are considered to have undervalued currencies. Clicking on the figure in the middle will take you to the Economist website where you can click on “video clip” to see a short informational video on the big mac index.
Click on the “U.S. News & World Report” image in the middle to go to a webpage that lists the different indicators that make up the index. Click on the “America’s Best Colleges 2008” image on the right to go to a webpage that lists the rankings for 2008.
Questions to ask: Do you think the combination of “health,” “education,” and “wealth” adequately measures “human development”? Why or why not? What other measures of “human development” might you include if you were to create your own human development index (e.g., environment, leisure, happiness, etc.)?
Is “life expectancy at birth” a good measure of health? Why or why not? Can you think of other ways to measure “health” that might bring about different results (e.g., obesity rates, infant mortality rate, etc.)? Is the combination of “adult literacy” and “gross enrollment” a good measure of “education”? Why or why not? Can you think of other ways to measure “education” that might bring about different results (e.g., percent in college, test scores, etc.)? Is “GDP per capita” a good measure of “wealth”? Why or why not? Can you think of other ways to measure “wealth” that might bring about different results (e.g., income inequality, poverty rates, etc.)?
If you click on either calculator it will take you to an interactive calculator that shows how the human development index (HDI) is calculated. Plug in the numbers above to see how the United States ends up with an HDI score of .951.
Click on the table above to access an interactive graph on the UNDP’s website 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. If you select the United States you will see that the United States has a HDI similar to Italy’s, but a much higher GDP per capita which suggests that Italy is doing a better job of turning income into education and health opportunities and therefore into higher levels of human development. If you agree with the Human Development Index’s measurement(s) of human development then the United States seems to be doing a pretty good job, but not as good as it could based on its level of income. Click on the “UNDP” images to the left and right of the title to go to an interactive map that lists HDIs for countries around the world.
Click on the table above to access an interactive graph on the UNDP’s website 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. If you select the United States you will see that the United States has a HDI similar to Italy’s, but a much higher GDP per capita which suggests that Italy is doing a better job of 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? According to the UNDP website, the answer is no, but: http://hdr.undp.org/en/statistics/faq/question,70,en.html But HDI is definitely better than GDP. http://hdr.undp.org/en/statistics/faq/question,71,en.html Ultimately, the concept of human development is much broader than what can be captured in the HDI, or any other composite index. The HDI, for example, does not reflect political participation or gender inequalities. The HDI and the other composite indices can only offer a broad proxy on some of the key issues of human development. A fuller picture of a country&apos;s level of human development requires analysis of other human development indicators and information. It is worth asking students what indicators they would include if they were to create their own human development index (Note: this is one of the exercises that comes at the end of this presentation).
Point out that the selection of indicators and the weighting that they receive have a huge impact on the results. Ask students to come up with their own examples.
Point out that the way that data are collected can have a huge impact on the results. Ask students to come up with their own examples.
Point out that there is often a tension between validity and parsimony.
Measuring social and econ development human dev index
Measuring Social and
A Look at the Human Development Index (HDI)
• What is an index?
• An index is a composite of indicators that
produces a single calculation which can then be
Let’s look at some examples!!
The Body Mass Index
Click here to calculate your
own body mass index.
The Big Mac Index
Click here to watch a short
informational video about
the “Big Mac Index”
Other Common Indexes
Click here to see
the 2008 rankings
Click here to see the indicators
that make up the index
Economic & 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
The Human Development Index (HDI)
…is the best known composite index
of social and economic well-
The Concept of
"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
Mahbub ul Haq -- Founder of the Human Development Report
How the UNDP Measures
• The HDI consists of three equally
• (1) “A long and healthy life” (Health)
• (2) “Knowledge” (Education)
• (3) “A decent standard of living” (Wealth)
Deconstructing Each Measure
• Each component of the HDI is measured
in the following way:
• Measured by life expectancy at birth.
• Measured as a combination of adult
literacy (with two-thirds weight) and gross
enrollment (with one-third weight).
• Measured by GDP per capita.
The United States
• In the United States, in 2005:
• The average life expectancy was 77.9.
• The adult literacy rate was 99%.
• The gross enrollment rate was 93.3%.
• The GDP per capita was $41,890.
• The HDI was .951.
• The HDI ranking was 12th.
Click here to access an
interactive HDI calculator.
U.S. HDI = .951
What does it mean that the U.S. ranks
12th in the world with an HDI of .951?
1 Luxembourg ($80,471) 11 United Kingdom ($35,051)
2 Ireland ($44,087) 12 Finland ($34,819)
3 Norway ($43,574) 13 Belgium ($34,478)
4 14 Sweden ($34,409)
5 Iceland ($40,277) 15 Qatar ($33,049)
6 Switzerland ($37,369) 16 Australia ($32,938)
7 Denmark ($36,549) 17 Singapore ($32,867)
8 Austria ($36,031) 18 Japan ($32,647)
9 Canada ($35,494) 19 Germany ($31,095)
10 Netherlands ($35,078) 20 Italy ($30,732)
United States ($43,444)
The IMF’s GDP Per Capita
Purchasing Power Parity (PPP)
As you can see here,
the United States has the
fourth highest GDP per capita
in the world. The question is:
how well is the United States
using its income to bring
about human development?
The UNDP’s HDI Rankings (2005)
1 Iceland (.968) 11 Finland (.951)
2 Norway (.968) 12
3 Australia (961) 13 Spain (.949)
4 Canada (.960) 14 Denmark (.949)
5 Ireland (.959) 15 Austria (.948)
6 Sweden (.956) 16 United Kingdom (.946)
7 Switzerland (.955) 17 Belgium (.946)
8 Japan (.953) 18 Luxembourg (.944)
9 Netherlands (.953) 19 New Zealand (.943)
10 France (.952) 20 Italy (.941)
United States (.951)
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?
• 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
• “A fuller picture of a country's level of human
development requires analysis of other human
development indicators and information.”
A Sampling of Other
• 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
• International Living’s “Quality of Life” Index
• The “Global Peace Index”
• Freedom House’s “Freedom Rankings”
Three Issues to Consider
Indexes Like the HDI
• 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
• In short, how well does the index actually
measure what it is supposed to be
• Who or what organization collected the
• 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?
• The whole point of an index is to simplify
the measurement of a particular
• In short, does the index rely upon as few
indicators as reasonably possible without
undermining its validity?
• How would you define human development?
• Specifically, what indicators would you focus
on if you were trying to measure human
• 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.