“Knowledge to build the world, knowledge to destroy the world.” K.S. Pang (2013)

The Knowledge Economy

Chapter 10: Human Development Index: The Proxy

Human Development Index (HDI)

This is a composite statistic of life expectancy index (LEI), education index (EI), and

income indices (II) used to rank all countries into four categories (which are very

high, high, medium and low) of human development. Before 2009, the HDI was a

composite statistic of LEI + ALI + GDPP. However, on 2010 (as respond to its

criticism on 2009), it changed to LEI + EI + II.

Top 15 Highest HDI Countries (UNDP Human Development Report on 2013)

“Knowledge to build the world, knowledge to destroy the world.” K.S. Pang (2013)

Education Index (EI) (Updated on 2010)

This is calculated from the Mean years of schooling index (MYSI) and the Expected

years of schooling index (EYSI). As we know that education is a major component of

well-being and is used in the measure of economic development and quality of life,

which is a key factor determining whether a country is a developed, developing, or

underdeveloped nation.

Mean years of schooling index (MYSI) is a calculation of the average number of

years of education received by people ages 25 and older in their lifetime based on

education attainment levels of the population converted into years of schooling based

on theoretical durations of each level of education attended.

Expected years of schooling index (EYSI) is a calculation of the number of years a

child of school entrance age is expected to spend at school, or university, including

years spent on repetition. It is the sum of the age-specific enrolment ratios for

primary, secondary, post-secondary non-tertiary and tertiary education and is

calculated assuming the prevailing patterns of age-specific enrolment rates were to

stay the same throughout the child’s life.

“Knowledge to build the world, knowledge to destroy the world.” K.S. Pang (2013)

Adult literacy index (ALI) (Before 2009)

This is a statistical measure used to determine how many adults (the citizen whoever

above 15 years old) can read and write in a certain area or nation. Adult literacy was

one of the factors in measuring the Human Development Index (HDI) before 2009 but

be replaced by Education Index (EI) due to its imperfections.

Imperfections of Human Development Index (HDI)

The Human Development Index (HDI) has been criticized on a number of grounds

including ideological bias towards egalitarianism and 'Western' model of

development, failure to include any ecological considerations, lack of consideration of

technological development or contributions to the human civilization, lack of

attentions to development from a global perspective, measurement error of the

underlying statistics.

The index has also been criticized as "redundant" by measuring aspects of

development that have already been exhaustively studied. It has been further criticised

for an inappropriate treatment of income, lacking year-to-year comparability, and

assessing development differently in different groups of countries.

In 2010 the UNDP reacted to the criticism on 2009 and updated the thresholds to

classify nations as low, medium, and high human development countries and they also

undertook a “systematic revision” (continuous updating of the human development

categories whenever formula or data revisions take place) of the methods used for the

calculation of the HDI to addresses the critics.