Cracking the HDI: Human Development Indexing Exercise

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Cracking the HDI: Human Development Indexing Exercise

November 12, 2013

This indexing exercise aims to demystify the principles and calculations in indexing, taking up the case of the human development index. It demonstrates that indexing is a simple idea and the actual steps can be mastered by anyone with basic high school mathematics. The document is in three sections. Section one is about measuring human development and, in particular, covers the idea of indexing, its strengths and limitations, principles of calculating an index and actual steps in the calculations. It shows how the HDI is used to represent, very simply, three dimensions of the aggregate human condition of a particular geographic area. Section two contains an exercise based on data for three imaginary countries – Masalabad, Guinea Town and Messifeng. The exercise requires the calculation of the HDI for each and finally comparing the three values to draw conclusions on ranking to help compare the three imaginary countries. The repetition in calculations – repeating the steps three times for the three countries is expected to help in firmer understanding and learning. Section three provides the solutions.