How is human development measured?

Human development is a relatively new concept; it is the main focus to "development economics" - a modern branch of economics. While human development used to be measured simply by increases in real GDP per capita, economists have now realised that this is not particularly accurate. This is because for human development to increase, it is necessary to increase the overall welfare and living standards for the people in the economy, and GDP per capita merely shows increased average income (which tells us nothing about the quality of life, the distribution of the income, the liberty of the citizens... etc.).

The more accepted measure of human development, then, is the HDI (Human Development Index). Measuring the HDI is rather more complicated than GDP per head, as it involves giving a score (between 0-1) for each of the 3 main indicators of human development, and then averaging them to get the HDI score for a country. The three areas are: life expectancy at birth; adult literacy rates/number of people in education and finally the GDP per head. It is believed that the HDI is a more accurate measure of human development because it takes into account more than just incomes.

It is not, however, without its criticisms. The first problem with the HDI is that it only measures 3 indicators of human development; there is no mention of the range of products available to consumers, or the condition of the government/freedom of the people. This ties in with the theory of human development that states that for an economy to be truly developed, the population have to be able to freely make a wide range of economic choices. The counter-argument to this is that if there were, say, 10 different indicators in the HDI then it wouldn't give an accurate picture of the change in development, as it would be very difficult for countries to improve all 10 areas.

The second criticism of the HDI is that it gives an equal weighting to each indicator, where some would argue that perhaps less should be given to GDP per head and more should be given to literacy rates or the other way around. This also ties in with the argument that says that the indicators should be more specific; it's no good having 100% of the population in education if the quality of that education is bad. Similarly, life expectancy may be high, but at what cost? Perhaps cigarettes, alcohol, fast food, fizzy drinks (things people like) are banned, meaning that the population are more healthy, but in no way meaning they are happier. Finally, the measure of GDP per capita has the same problem as mentioned earlier - it doesn't show income distribution.