Human Development Indices: Old and New

In October 2010, the United Nations Development Program (UNDP) disseminated the revised methodology of the Human Development Index (HDI) and added three indices, namely, Inequality in Human Development Index (IHDI), the Gender Inequality Index (GII) and the Multi-dimensional Poverty Index (MPI) to the family of human development indices. These changes were justified on grounds of measuring deprivation, poverty and inequality in the state of human development within and across countries. This paper compares the estimated HDI using the old and new (revised) methodology, and examines the feasibility of constructing the new human development indices (IHDI, GII and MPI) in the states of India.

Results indicate that the value of HDI computed using the new methodology is substantially lower than that computed with the old methodology cutting across the states. However, the overall ranks of the states in the new and old HDI are similar. The computation of life table for socioeconomic groups would be helpful to disaggregate HDI and IHDI. The MPI can be computed using data from the National Family and Health Survey-3, but it needs considerable improvement in the conceptualisation and contextualisation of multi-dimensional poverty indicators.