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International Index Economy & Banking Reports & Indices

Three dimensions and a geometric mean: how the Human Development Index is built

The Human Development Index is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and having a decent standard of living.
The HDI is the geometric mean of normalized indices for each of the three dimensions.
The health dimension is assessed by life expectancy at birth.
The education dimension is measured by mean of years of schooling for adults aged 25 years and more and expected years of schooling for children of school entering age.
The standard of living dimension is measured by gross national income per capita.
The HDI uses the logarithm of income, to reflect the diminishing importance of income with increasing GNI.
It was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone.
The Index simplifies and captures only part of what human development entails: it does not reflect on inequalities, poverty, human security or empowerment, and the Human Development Report Office provides other composite indices as broader proxies on some of the key issues of human development, inequality, gender disparity and poverty.

Dimensions: Three Aggregation: Geometric mean of normalized indices Health indicator: Life expectancy at birth Standard of living indicator: Gross national income per capita
Why it matters for exams: Papers ask which indicator stands for which HDI dimension and which mean is used to combine them, and a wrong answer here costs a whole question set.
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In plain words

Geometric mean Geometric mean — An average found by multiplying the values and taking the root, so a very low value in one dimension pulls the whole index down.

GNI Gross national income — The total income earned by a country's residents, used per head in the Index.

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