Appendix 4: Indicators for determining human development level (HDI)

Release date	16/02/2010
Contributor	Norbert Sidibe

The state of the world proposes here and in the statistical Tables of the geopolitical entities an "Indicator of human development" (IDH). This composite indicator is calculated every year, since 1990, by the United Nations Development Programme (UNDP).

Such an initiative came about because the indicator of development most commonly used, the gross domestic product (GDP) per capita, calculated at market exchange rate, is, in many cases, a very bad measure of the level of well-being attained. For example, Saudi Arabia, with 9,338 dollars per capita in 1994, had not less 38.2% of illiterates in its adult population and had an infant mortality rate of 28 °/oo. Costa Rica, whose GDP per capita is 62% of Saudi Arabia's, seems nevertheless to have a higher human "development"; it only has 5% of illiterates and the infant mortality is three times less (13 °/oo).

In the ideal, an indicator of "human development" should be able to take into account many factors.

UNDP preferred to retain only three elements to construct its index: life expectancy at birth; level of instruction, represented by the level of adult literacy and raw rate of schooling irrespective of levels (with a weighting of two thirds for the first and one third for second); and at last the income represented by per capita GDP after a double transformation taking into account the relative difference in prices from one country to the other and because the income does not increase development human in a linear manner (when we go fromm 1,000 to 2,000 dollars per capita income yearly, the diversity of new choices that opens up increases more than when we go from 14,000 to 15,000 dollars).

Minimum and maximum values are set for each of these elements:

- life expectancy at birth: 25 to 85 years;
- adult literacy : 0% to 100% the value;
- rate of schooling: 0% to 100%;
- Real GDP per capita: 100 dollars PPA to 40,000 dollars PPA.

Each of these indicators is first expressed on a scale of 0 to 1. Thus, life expectancy at birth in Costa Rica (76,6 years) is given the value:

0.86 = 76.6 - 25 : (85 - 25)

To the life expectancy in Saudi Arabia (70.3 years) is given the value:

0.755 = 70.3 - 25 : (85 - 25)

The same calculation is done for the indicator of level of instruction and for the indicator of income level. In second stage, we work out the average of the three figures thus obtained. We thus get the composite index of human development. We end up with an HDI of 0.889 for Costa Rica and 0.774 for Saudi Arabia. By this means, it is possible to operate ranking of all the countries.
Francisco Vergara
1996-1997 Statistics