Economic Development Indices Questions Medium
The Inequality-adjusted Human Development Index (IHDI) is a measure that takes into account both the average achievements in human development and the distribution of those achievements among the population. It is an alternative to the traditional Human Development Index (HDI), which only considers average achievements.
The IHDI adjusts the HDI by incorporating a measure of inequality, typically the Gini coefficient, which reflects the distribution of income, education, and life expectancy within a country. By considering inequality, the IHDI provides a more comprehensive understanding of human development by highlighting the disparities that exist within a society.
The IHDI is calculated by adjusting each component of the HDI based on its level of inequality. For example, if there is a high level of income inequality in a country, the income component of the HDI will be adjusted downwards in the IHDI calculation. This adjustment reflects the fact that unequal distribution of income can hinder overall human development.
The IHDI allows policymakers and researchers to assess not only the average level of human development in a country but also the extent to which that development is shared among its population. It provides a more nuanced perspective on development by considering the impact of inequality on overall well-being.
Overall, the IHDI serves as a valuable tool for understanding the multidimensional nature of economic development and the importance of addressing inequality in order to achieve sustainable and inclusive human development.