What does HDI add to income data?

H2 Economics - syllabus 9570, 2026

Original teaching notes

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Health and education broaden the comparison, but HDI is still a summary.

The Human Development Index combines health, education and income dimensions. Its measures include life expectancy, mean and expected years of schooling, and GNI per capita adjusted for purchasing power. A higher HDI indicates higher achievement in this composite, not that every resident fares better. It does not directly capture all environmental conditions, inequality or the quality of each service.

Human Development Index
The Human Development Index (HDI) combines health, education and income indicators into one summary number. These cover life expectancy, schooling and income per person adjusted for differences in purchasing power.
Watch for this
A higher HDI does not prove every component or every person improved. It also leaves out aspects of wellbeing such as environmental quality and the distribution of income.

Use the dimensions, not only the rank

Health

Life expectancy at birth summarises a health outcome; it does not describe each person's health or access to care.

Education

Mean years of schooling is the average completed by adults. Expected years estimates the schooling a child entering school can expect. These describe attainment and prospects; years alone do not fully measure education quality.

Income

GNI per capita is adjusted for differences in prices between economies so the comparison reflects what income can buy. No HDI formula or calculation is needed here.

Limits

Two places with similar HDI can differ in inequality, safety, pollution and leisure. A rank can change because other countries change, even when a country's own index rises.

Worked example: Similar income, different outcomes

Two economies have similar GNI per capita. One has longer life expectancy and more years of schooling, while its air pollution is worse.

  1. Income alone misses differences in health and education.
  2. HDI adds evidence on these dimensions and can distinguish broader achievements.
  3. Environmental evidence is still needed: a better HDI is not a complete ranking of wellbeing.

Watch out for this

HDI measures everything that GDP misses.

HDI adds selected dimensions. Distribution, environment and other outcomes still need separate evidence.

Check your understanding

Which set contains HDI's three dimensions?

  1. Income, equality and carbon emissions.
  2. Health, education and income.
  3. Inflation, unemployment and exports.

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