Development means improving people's lives: income, health, education and freedom to choose. To compare places, geographers use numbers, and each number shows some things and hides others. The mix of sectors is one clue; here are the main measures. Economics covers GDP itself in what GDP leaves out.
Key idea
| Dimension | Indicator | Goalposts (minimum, maximum) |
|---|---|---|
| Health | Life expectancy at birth | 20 and 85 years |
| Knowledge | Mean years of schooling (adults 25+) and expected years of schooling (children) | 0 to 15 years; 0 to 18 years |
| Standard of living | GNI per capita (in purchasing-power dollars), on a log scale | 100 and 75,000 |
Each dimension becomes an index from 0 to 1: $(\text{actual} - \text{min}) / (\text{max} - \text{min})$. The education index averages its two parts. The HDI is the geometric mean of the three: $\text{HDI} = \sqrt[3]{I_{\text{health}} \times I_{\text{education}} \times I_{\text{income}}}$. Countries are grouped as very high (0.800 and up), high (0.700 to 0.799), medium (0.550 to 0.699) and low (below 0.550).
Why it works
Worked example: Compute an HDI
- Multiply: $0.80 \times 0.60 \times 0.70 = 0.336$.
- Take the cube root: $\sqrt[3]{0.336} \approx 0.695$.
- 0.695 is from 0.550 to 0.699.
Answer: About 0.695: medium human development.
Worked example: The health index
- Use the goalposts 20 and 85.
- $(72 - 20) \div (85 - 20) = 52 \div 65 = 0.8$.
Answer: 0.80.
Common mistake