Measuring Poverty I examined how inequality and vulnerability can be used to measure poverty. Measuring Poverty II talks about two common ‘indices’ used to measure poverty – the popular UN Human Development Index and the Human Poverty Index.

Top

The United Nation’s Human Development Index (HDI) is one of the most common measures of a country’s progress, making it an often-used indicator of poverty. The HDI was developed by Indian economist Amartya Sen in conjunction with Pakistani economist Mahbub ul Haq, in order to create a better measure of living standard than the traditional Gross Domestic Product (GDP) per capita measures. The HDI was first calculated for UN countries in 1990, but HDIs have been calculated back to 1975 for many countries, using past data (the UN has not attempted to calculate HDIs before 1975 due to lack of necessary data).

The HDI, rather than focusing just on income, uses a variety of variables to determine a country’s development progress: life expectancy at birth, education (based on adult literacy rates and school enrollment ratios), and GDP per capita. Using these, a decimal value between 0 and 1 (the HDI) is computed, the closer to one the better. UN countries have been ranked by their HDI since 1975, but changes have since been made to the method of calculation – most notably in 1999, when the income portion of the Index was reworked. This makes it hard to compare HDI data over the years, though the UN published a comparative table of the HDIs of UN countries in 1975, 1980, 1985, 1990, 1995, 2000, and 2002 in their Human Development Report (HDR) 2004.

As of HDR 2005, Norway led the world in human development, with an HDI of 0.963. The United States was 10th, with an HDI of 0.944. At the other end of the spectrum is Niger (in sub-Saharan Africa), with an HDI of 0.281. 30 of the 32 ‘Low Human Development’ countries are in Africa (the exceptions are Haiti in the Caribbean and Yemen in the Middle East). These sub-Saharan states, along with the former Soviet republics, are the only countries in the world that are declining in human development.

The world by HDI: this map color-codes countries based on their U.N. HDI. Green is good, red is bad.

Top

The Human Poverty Index (HPI) is very similar to the HDI. The only real difference is the variables each uses to compute the final Index. The HDI examines positive signs of development, such as life expectancy, while the HPI looks at negatives. In a nutshell, the HDI increases the more GOOD things a country has, while the HPI decreases the less BAD things a country has. A high HDI is a sign of accomplishment, while a high HPI is a sign of failure. The United Nations Development Programme (UNDP), sums it up like this: “While the HDI measures average achievement, the HPI measures deprivations in the three basic dimensions of human development captured in the HDI.”

A man works at a brick yard.

The HPI is divided into two very different Indexes – the HPI-1 for developing countries, and the HPI-2 for industrialized nations, generally those part of the Organization for Economic Cooperation and Development (OECD). The HPI-1 uses the probability of not surviving to the age of 40, the adult illiteracy rate, an average of the percentage of the population without clean water, and the percentage of babies born underweight to calculate the final Index, a percent value (such 41.5% for Angola), the closer to 0%, the better. The HPI-2, on the other hand, uses the probability of not surviving to age 60, the percentage of adults without functional literacy skills, the percentage of the population below the income poverty line (for the HPI-2, it is set at 50% of the median household income, because most countries for which the HPI-2 is calculated are industrialized), and the long-term unemployment rate. This, too, is used to create a percentage value for the Index, such as 15.4% for the U.S. However, the HPI-1 and HPI-2 CANNOT be directly compared.

Right now, Niger has the worst HPI-1 percentage, 64.4%. Of the OECD countries for which the HPI-2 is calculated for, Sweden has the best value, 6.4%. The U.S. is 17th.

Top

Gilbert, Geoffry. World Poverty. Santa Barbara: ABC-CLIO 2004

Human Development Report 2005 Development Indicators

Human Development Report 2005 Technical Note (PDF)

"The Guardian Profile: Amartya Sen." The Guardian Unlimited. 31 March 2001.

Wikipedia: Human Development Index

Top

Copyright © 2006 ThinkQuest Team 00282