Human Development Index

The United Nations Development Programme (UNDP) developed an index designed to create a broader view of a country's development than using average income alone, which on the face of it takes no account of the diffusion of economic benefits through a society or other aspects of human well-being. The Human Development Index (HDI) is a simple summary measure of three dimensions of the human development concept: living a long and healthy life, being educated and having a decent standard of living. The UNDP's rationale is that:

The HDI combines the three dimensions into one index, and scores each country for each year, with a summary measure between zero and one, a higher score meaning greater human development. While, as we shall see, national income correlates strongly with the HDI, the measure also gives weight to distribution and to the development of social infrastructure. Two components of the HDI – longevity and educational attainment – by their nature reflect upon the well-being of the population as a whole.

The idea of a composite scale is to go beyond the limits of individual measures to capture more of the integrity and complexity of the social experience. An intrinsic problem of constructing composite indicators is that even if all the elements can be scored satisfactorily there is always an arbitrariness about their weightings, how the components are combined into one scale.