In a previous blog we examined the relation between GDP and the Human Development Index (HDI) which has been published on an annual basis for the last 25 years by the UN Development Programme (UNDP). In this post, I want to dive a bit deeper into the latter and explore some of its potential policy implications.

### HDI components and calculation

The HDI has three main components or subindexes: Income, health and education (or knowledge). The statistical indicators used to estimate the first two components are: Gross national Income per capita (GNI) and life expectancy. The education subindex is comprised of two indicators: literacy and quality of education. One can thus think of the HDI as a 3D index where each of the subindexes constitutes one of its three orthogonal axis. And the HDI is the (more…)