How is the Inequality-adjusted Human Development Index (IHDI) calculated?

The Inequality-adjusted Human Development Index (IHDI) is calculated by taking into account both the average achievements in three basic dimensions of human development (health, education, and income) and the inequality in these achievements among the population.

To calculate the IHDI, the first step is to calculate the Human Development Index (HDI), which measures the average achievements in health, education, and income. The HDI is calculated by combining three indicators: life expectancy at birth, mean years of schooling, and gross national income per capita.

Once the HDI is calculated, the next step is to adjust it for inequality. This is done by incorporating a measure of inequality in each of the three dimensions of human development. The inequality-adjusted HDI takes into account not only the average achievements but also the distribution of these achievements among the population.

To calculate the inequality adjustment, a measure of inequality such as the Gini coefficient is used for each dimension. The Gini coefficient measures the extent to which the distribution of a variable deviates from perfect equality. A higher Gini coefficient indicates higher inequality.

The inequality adjustment is then applied to each dimension of the HDI by multiplying the HDI value by the Gini coefficient for that dimension. This adjustment reduces the HDI value for countries with higher inequality, reflecting the negative impact of inequality on human development.

Finally, the adjusted HDI values for each dimension are combined to calculate the IHDI. The IHDI provides a more comprehensive measure of human development by considering both the average achievements and the inequality in these achievements. It allows for a better understanding of the distribution of human development within a country and across different countries.