The Human Development Index (HDI)

The most widely used composite measure of development today is the Human Development Index (HDI), introduced by the United Nations Development Programme (UNDP) in 1990, building on the pioneering work of economists Mahbub ul Haq and Amartya Sen. HDI is built on the idea that development is ultimately about expanding people's real choices and capabilities — not merely raising the goods and services they can buy.

HDI combines three dimensions of human development, each first converted into a dimension index scaled between 0 and 1 (using the formula: (actual value − minimum reference value) ÷ (maximum reference value − minimum reference value)):

1. A Long and Healthy Life — measured by life expectancy at birth.
2. Knowledge — measured by a combination of expected years of schooling and mean years of schooling actually completed.
3. A Decent Standard of Living — measured by Gross National Income (GNI) per capita, adjusted for purchasing power.

The three dimension indices are then combined (by the geometric mean) into a single overall HDI score between 0 and 1 — the closer to 1, the higher the level of human development. Countries are conventionally grouped into Very High, High, Medium and Low human-development categories based on this score. …