1. Human Development Index

2. Three factors of Development
Economic
Social
Demographic

3. HDI
HDI: Human Development Index, created by the United Nations, is a reflection of those three factors
The UN selects one economic factor, two social factors, and one demographic factor to compute the HDI
The highest HDI possible is 1.0, or 100%
Norway: 0.955, Australia: 0.938, US: 0.937, Netherlands: 0.921, Germany: 0.92

4. Economic Factors
The United Nations using gross domestic product per capita as the economic factor for calculating HDI
Other economic factors are considered:
Types of jobs
Productivity
Raw Materials
Consumer Goods

5. GDP Per Capita
Individuals in MDC (More Developed Countries) typically earn more income than in (Lesser Developed Countries)
Per capita income is difficult to calculate in LDCs
GDP is the value of the total output of goods and services produced within a country, normally during a year
Geographers use GDP per capita instead
GDP divided by total population

6. Types of Jobs
Jobs typically fall into three categories: primary, secondary, and tertiary
In an LDC, sometimes 75% of workers are in a primary sector, compared to 5% in an MDC
In an MDC, jobs have decreased in primary and secondary sectors, and increased in tertiary

7. Productivity
Workers in an MDC are more productive than workers in an LDC
Productivity: the value of a particular product compared to the labor used to make it
Machinery can help increase productivity

8. Raw Materials
Development requires access to raw materials and energy sources
LDCs that have petroleum are able to advance more quickly than those that do not
Not all developed countries have raw materials (ex: Japan)
Developed through world trade and technology

9. Consumer Goods
Wealth can be divided between necessities (clothing, shelter, and food) and luxuries (television, cars, technology)
The type of goods and services purchased by consumers is another indicator of economic development
How important is the car? Telephone? Television?

10. Social Indicators
The United Nations uses literacy rate and Gross Enrollment Rate as the social factors for calculating HDI.
MDCs use their wealth to provide schools, hospitals, and welfare services
Social factors include:
Education and literacy
Health and welfare

11. Education and Literacy
The higher the level of development, the greater are both the quantity and quality of education
The quality of education is measured in the student/teacher ratio and the literacy rate
Literacy Rate: the percentage of a country’s people that can read and write
Typically 95% in MDC, and less than 33% in LDC

12. Health and Welfare People are healthier in MDCs
Most developed states have socialized healthcare
United States is only major developed country where health care is privatized
MDCs also offer welfare assistance to help those unable to work
Denmark, Norway, and Sweden provide the most welfare assistance

13. Demographic Indicators
The United Nations uses life expectancy as the demographic indicator for HDI.
Demographic indicators include:
Life Expectancy
Infant Mortality Rate
Natural Increase Rate
Crude Birth Rate

14. Life Expectancy
Better health and welfare cause people in MDCs to live longer
Life expectancy: the average number of years a newborn can expect to live at current mortality levels
Babies are expected to live to their mid-40s in LDCs, and mid-70s in MDCs
MDCs have large number of elderly people, and LDCs have large number of children

15. Infant Mortality Rate
Infant Mortality Rate: The annual number of deaths or infants under one year of age, compared to the number of live births
More babies survive infancy in an MDC
90% of infants survive in an LDC
99% of infants survive in an MDC

16. Natural Increase Rate
NIR: the percentage by which a population grows in a year.
It is computed by subtracting the CBR-CDR
The NIR is about 2% in LDCs, and 1% in MDCs

17. Crude Birth Rate
Crude Birth Rate: the total number of live births in a year for every 1,000 people alive in the society
LDCs have higher NIRs, because they have higher CBRs
The CBR in an LDC is 40 per 1,000
The CBR in an MDC is 15 per 1,000

18. Find a partner with a calculator You will be turning this in
Calculating the HDI
Find a partner with a calculator
You will be turning this in

19. Write this info down Kuwait: Brazil:
life expectancy at birth 77.1 years (LE)
the adult literacy rate is 93.3% (LR)
the education enrollment ratio is 73% (EE)
and the gross domestic product per capita is $19,384. (GDP)
Brazil:
the life expectancy at birth is 70.8 years
the adult literacy rate is 88.6%
the education enrollment ratio is 86%
and the gross domestic product per capita is $8,195

20. Question
1. Before making any calculations, how do you think these two countries will compare if we use these measures to come up with a single HDI for each country?

21. Educational Percentage
To calculate the HDI, first combine the two measures of education using a weighted average, with a two-thirds weight for the adult literacy rate (ALR) and a one-third weight for the education enrollment ratio (EER). The formula for the weighted average to give the education percentage (EP) as a measure of education is

22. Educational Percentage

23. HDI calculations
To calculate a single numerical measure of human development, the HDI, we want to combine the measure of health, which is in years, with the measure of education we just found, which is given as a percentage, with the measure of economic well-being, which is given in U.S. dollars.

24. Question
3. Explain why we cannot combine these values directly with different units (like years, percent, and dollars) into a single measure.

25. Life Expectancy
To convert life expectancy values to a life expectancy index number, we first identify a reasonable minimum and maximum for each of these values. The United Nations uses 25 as the minimum and 85 as the maximum. Then the life expectancy value (LEV) is converted to a life expectancy index (LEI) using the equation

26. Question
4. Explain why an index number defined this way will be between 0 and 1 and will not have any units (like years) associated with it.

27. Life Expectancy Index

28. Educational Index
The education percentage (the weighted average of the adult literacy rate and
the education enrollment ratio you computed in question 1) is converted to an index value by using a
minimum of 0 (percent) and a maximum of 100 (percent). This gives the education index (EI) in terms
of the education percentage (EP) as

29. Educational Percentage

30. Calculating the HDI
For the final conversion to an index value, we convert the gross domestic product per capita in US$ (GDP) to an index value. This is done a bit differently than the previous conversions. Here base-ten logarithms are used so that the effect of a larger GDP value is diminished. (Natural logs may be used as well.) The minimum and maximum values used by the United Nations for the GDP are 100 and 40,000, respectively, and the equation to calculate the GDP index value (GDPI)

31. GDP Index

32. Final HDI Index

33. Final Reflection