Growth, Development and Happiness               2.5
     humAn DeveloPment inDex                                      (ii) Expected years of schooling (for
                                                                        children of school entering age): These
     The dilemma of measuring the developmental level
                                                                        estimates are based on enrolment by age
     of economies was solved once the United Nations
                                                                        at all levels of education and population
     Development Programme (UNDP) published
                                                                        of official school age for each level of
     its first Human Development Report (HDR) in
                                                                        education. Expected years of schooling is
     1990. The report had a human development index
                                                                        capped at 18 years.
     (HDI) which was the first attempt to define and
     measure the level of development of economies.                These indicators are normalised using a
                                                             minimum value of zero and maximum values are
     The ‘index’ was a product of select team of leading
                                                             set to the actual observed maximum value of mean
     scholars, development practioners and members
                                                             years of schooling from the countries in the time
     of the Human Development Report office of the
                                                             series, 1980–2012, that is 13.3 years estimated for
     UNDP. The first such team which developed the
                                                             the United States in 2010. The education index is
     HDI was led by Mahbub ul Haq and Inge Kaul.
                                                             the geometric mean of two indices.
     The term ‘human development’ is a corollary of
     ‘development’ in the index.                                   The Health component is measured by the
                                                             life expectancy at birth component of the HDI and
           The HDR measures development by
                                                             is calculated using a minimum value of 20 years
     combining three indicators—Health, Education
                                                             and maximum value of 83.57 years. This is the
     and Standard of Living—converted into a
                                                             observed maximum value of the indicators from
     composite human development index, the HDI.
                                                             the countries in the time series, 1980–2012. Thus,
     The creation of a single statistic in HDI was a         the longevity component for a country where life
     real breakthrough which was to serve as a frame         expectancy birth is 55 years would be 0.551.
     of reference for both ‘social’ and ‘economic’
                                                                   The Standard of Living component is
     development. The HDI sets a minimum and a
                                                             measured by GNI (Gross National Income/
     maximum for each dimension, called goalposts,
                                                             Product) per capita at ‘Purchasing Power Parity
     and then shows where each country stands in
                                                             in US Dollars’ (PPP $) instead of GDP per capita
     relation to these goalposts, expressed as a value
                                                             (PPP $) of past. The goalpost taken for minimum
     between 0 and 1 (i.e., the index is prepared on the
                                                             income is $100 (PPP) and the maximum is US
     scale of one). The three indicators4 used to develop
                                                             $87,478 (PPP), estimated for Qatar in 2012. The
     the composite index are as given below:
                                                             HDI uses the logarithm of income, to reflect the
           The Education component of the HDI is             diminishing importance of income with increasing
     now (since HDR-2010) measured by two other              GNI.
     indicators–                                                   The scores for the three HDI dimension
           (i) Mean of years of schooling (for adults        indices are then aggregated into a composite
                aged 25 years): This is estimated based      index using geometric mean. The HDI facilitates
                on educational attainment data from          instructive comparisons of the experiences within
                censuses and surveys available in the        and between different countries.
                UNESCO Institute for Statistics database           The UNDP ranked5 the economies in
                and Barro and Lee (2010) methodology.        accordance of their achievements on the above-
        4.    UNDP, Human Development Report, 2013 and       given three parameters on the scale of one (i.e.,
              Human Development Report, 2010, United Nations 0.000–1.000). As per their achievements the
              Development Programme, New York, USA, 2013 and
              2010.                                              5.   Todaro and Smith, Economic Development, p. 58.