The Human Development Index (HDI) is derived from a geometric mean of normalized indices representing key dimensions of human development: life expectancy, education, and standard of living. The life expectancy index reflects health and longevity, calculated based on a minimum value of 20 years and a maximum observed value. The education dimension is assessed using mean years of schooling and expected years of schooling, each also normalized using minimum and observed maximum values. The standard of living is represented by Gross National Income (GNI) per capita, which is logarithmically transformed and normalized to account for diminishing returns with increasing income.
This composite index offers a broad overview of a nation’s progress, moving beyond purely economic indicators. Its value lies in highlighting disparities in human development outcomes across countries and within regions, providing a framework for policymakers to identify areas requiring focused intervention. Historically, its introduction marked a shift towards a more holistic assessment of national well-being, emphasizing the importance of health, education, and living standards in driving sustainable development.