Values Reflected in the Human Development Index

Abstract

The Human Development Index (HDI) implicitly defines ``human development'' and ranks countries accordingly. To elucidate the HDI's meaning of ``human development,'' the paper examines the sensitivity of the HDI to changes in its components, namely social indicators of education, longevity and standard of living. The HDI is next compared with two alternatives, the Life Quality Index (LQI) and a Time Allocation Index (TAI) developed in this paper from the HDI's components. Also considered is the likely uncertainly in the HDI and what it means for HDI rankings.It is concluded that the HDI's weighting of the gross domestic product is in good agreement with peoples' preferences as revealed in the LQI and the TAI; further, that the HDI places many times greater weight on education than is indicated by peoples' allocation of time in developed countries. Literacy is accorded very high weight in the HDI, but its measure is unreliable. The HDI ranking of highly developed nations is so close and so uncertain that it is meaningless.