Human Development Index:
The dilemma of measuring the developmental level of economies was solved once the United Nations Development Programme (UNDP) published its first Human Development Report (HDR) in 1990. The report had a human development index (HDI) which was the first attempt to define and measure the level of development of economies.
The ‘index’ was a product of select team of leading scholars, development practioners and members of the Human Development Report office of the UNDP. The first such team which developed the HDI was led by Mahbub ul Haq and Inge Kaul. The term ‘human development’ is a corollary of ‘development’ in the index.
The HDR measures development by combining three indicators—Health, Education and Standard of Living—converted into a composite human development index, the HDI. The creation of a single statistic in HDI was a real breakthrough which was to serve as a frame of reference for both ‘social’ and ‘economic’ development. The HDI sets a minimum and a maximum for each dimension, called goalposts, and then shows where each country stands in relation to these goalposts, expressed as a value between 0 and 1 (i.e., the index is prepared on the scale of one). The three indicators4 used to develop the composite index are as given below: The Education component of the HDI is now (since HDR-2010) measured by two other indicators–
(i) Mean of years of schooling (for adults aged 25 years): This is estimated based on educational attainment data from censuses and surveys available in the UNESCO Institute for Statistics database and Barro and Lee (2010) methodology.
(ii) Expected years of schooling (for children of school entering age): These estimates are based on enrolment by age at all levels of education and population of official school age for each level of education. Expected years of schooling is capped at 18 years.

These indicators are normalised using a minimum value of zero and maximum values are set to the actual observed maximum value of mean years of schooling from the countries in the time series, 1980–2012, that is 13.3 years estimated for the United States in 2010. The education index is the geometric mean of two indices.

The Health component is measured by the life expectancy at birth component of the HDI and is calculated using a minimum value of 20 years and maximum value of 83.57 years. This is the observed maximum value of the indicators from the countries in the time series, 1980–2012. Thus, the longevity component for a country where life expectancy birth is 55 years would be 0.551.

The Standard of Living component is measured by GNI (Gross National Income/Product) per capita at ‘Purchasing Power Parity in US Dollars’ (PPP $) instead of GDP per capita (PPP $) of past. The goalpost taken for minimum income is $100 (PPP) and the maximum is US $87,478 (PPP), estimated for Qatar in 2012. The HDI uses the logarithm of income, to reflect the diminishing importance of income with increasing GNI.
The scores for the three HDI dimension indices are then aggregated into a composite index using geometric mean. The HDI facilitates instructive comparisons of the experiences within and between different countries.
The UNDP ranked the economies in accordance of their achievements on the above given three parameters on the scale of one (i.e., 0.000–1.000). As per their achievements the countries were broadly classified into three categories with a range of points on the index:
(i) High Human Development Countries: 0.800–1.000 points on the index.
(ii) Medium Human Development Countries: 0.500–0.799 points on the index.
(iii) Low Human Development Countries: 0.000–0.499 points on the index.

The Debate Continues:
Though the UNDP commissioned team had evolved a consensus as to what constitutes development, academicians and experts around the world have been debating this issue. By 1995, economies around the world had officially accepted the concept of human development propounded by the UNDP. Basically, the UNDP designed HDR was used by the World Bank since the 1990s to quantify the developmental efforts of the member countries and cheap developmental
funds were allocated in accordance. Naturally, the member countries started emphasising on the parameters of income, education and life expectancy in their policymaking and in this way the idea of HDI got obligatory or voluntary acceptance around the world.
For many years, experts and scholars came up with their own versions of defining development. They gave unequal weightage to the determinants defining development, as well as selected some completely different parameters which could also denote development in a more suitable way. Since quality is a matter of value judgement and a normative concept, there was scope for this representation. Most of such attempts were not prescriptions for an alternative development index, but they were basically trying to show the incompleteness of the HDI, via intellectual satires.
One such attempt was made by economists and scholars of the London School of Economics in 1999 which concluded that, Bangladesh was the most developed country in the world with the USA, Norway, Sweden getting the lowest ranks in the index.
Basically, it is very much possible to come out with such an index. As for example, we may say that peace of mind is a necessary element of development and betterment in human life which depends heavily on the fact as to how much sleep we get everyday. House theft and burglary are major determinants of a good night’s sleep which in turn depends on the fact as how assured we go to sleep in our homes at night from burglars and thieves. It means we may try to know a good sleep by the data of thefts and burglaries in homes. Since minor house thefts and burglaries are underreported in police stations, the surveyor, suppose tried to know such cases with data as how many ‘locks’ were sold in a country in  particular year. In this way a country where people hardly have anything to be stolen or no risk of being burgled might be considered having the best sleep in night, thus the bestpeace of mind and that is why this will be the most developed country.
Basically, the HDI could be considered as one possible ways of measuring development which was evolved by the concerned group of experts with the maximum degree of consensus. But the index which calculates the development of economies on certain parameters might be overlooking many other important factors, which affect the development of an economy and standard of living. As per experts, such other determinants affecting our living conditions might be:
(i) cultural aspects of the economy,
(ii) outlook towards aesthetics and purity of the environment,
(iii) aspects related to the rule and administration in the economy,
(iv) people’s idea of happiness and prestige,
(v) ethical dimension of human life, etc.

Inequality-Adjusted HDI (IHDI):
What is the purpose of the Inequality-adjusted HDI (IHDI)?
- The HDI represents a national average of human development achievements in the three basic dimensions making up the HDI: health, education and income.
- Like all averages, it conceals disparities in human development across the population within the same country. Two countries with different distributions of achievements can still have the same average HDI value.
- The IHDI takes into account not only the average achievements of a country on health, education and income, but also how those achievements are distributed among its population by “discounting” each dimension’s average value according to its level of inequality.
- An IHDI value can be interpreted as the level of human development when inequality is accounted for.
- The relative difference between IHDI and HDI values is the loss due to inequality in distribution of the HDI within the country.

Gender Development Index (GDI)
-The GDI measures gender gaps in human development achievements by accounting for disparities between women and men in three basic dimensions of human development—health, knowledge and living standards using the same component indicators as in the HDI.
-The GDI is the ratio of the HDIs calculated separately for females and males using the same methodology as in the HDI.
-The closer the ratio is to 1, the smaller the gap between women and men.
-It is a direct measure of gender gap showing the female HDI as a percentage of the male HDI.
-The GDI shows how much women are lagging behind their male counterparts and how much women need to catch up within each dimension of human development.
-It is useful for understanding the real gender gap in human development achievements and is informative to design policy tools to close the gap.

HAPPINESS:
The World Happiness Report 2018 (WHR 2018) was released by mid-March, 2018 by the Sustainable Development Solution Network (a UN body). The report is a 156-nation survey, sixth of its kind (in 2014 the report was not published)— and is the outcome of a coalition of researchers.8 The report measures happiness and well-being of the nations to help guide public policy on the basis of the following six parameters:
1. GDP per capita (at PPP)
2. Social support (someone to count on)
3. Healthy life expectancy at birth
4. Freedom to make life choices
5. Generosity
6. Perception of corruption
Major highlights of the WHR 2018 are as given below:
- Top 10 happiest countries (their 2017 ranks given in brackets) in decreasing order of their ranks are—Finland (5), Norway (1), Denmark (2), Iceland (3), Switzerland (4), Netherlands (6), Canada (7), New Zealand (8), Sweden (10) and Australia (9).
- Burundi (147) is the unhappiest country on the earth which has been ranked 156th— followed by Central African Republic (155) and South Sudan (147). Their ranks for the last year (2017) are given in the bracket.
- India is ranked 133rd—slipping 11 ranks from 2017 (when it was ranked 122nd, four ranks below its rank in 2016). It is below all eight SAARC nations (except the war-ravaged Afghanistan that is at 145th)—Pakistan at 75th (up five spots from last year), Nepal at 101st, Bhutan at 97th, Bangladesh at 115th, Sri Lanka at 116th and China at 86th spot.
- Finland has got several accolades from the report as—the most stable, the safest and best governed country in the world together with being the least corrupt and the most socially progressive and the happiest immigrants. Its police are the world’s most trusted and its banks the soundest. These are the achievements of a country (with 5.5 million population) which faced the last naturally caused famine just 150 years back.
- The report devotes a special chapter to why the USA, ranked 18th (down four ranks from the last report), once towards the top of happiness table, has slipped down the league despite having among the highest per capita incomes. As per the report, its happiness is being systematically undermined by three inter-related epidemic diseases—obesity, substance abuse (especially opioid addiction) and depression.
- Latin America is renowned for corruption, high violence and crime rates, unequal distribution of income and widespread poverty, yet has consistently scored relatively high in the happiness report. The report attributes this to ‘the abundance of family warmth and other supportive social relationships frequently side-lined in favour of an emphasis on income measures in the development discourse’.
- For the first time the report has included the happiness of immigrants (in 117 countries)—their happiness depends on the happiness of the place where they migrated to (the host country)—with a drag of 10 to 25 per cent (due to legacy factors). Meanwhile, the greatest human migration in history—the hundreds of millions of people who have moved from the Chinese countryside into cities—has not advanced happiness at all.

The report ends on a different tack, with a focus on three emerging health problems that threaten happiness—obesity, the opioid crisis, and depression. Although set in a global context, most of the evidence and discussion are focused on the USA, where the prevalence of all three problems has been growing faster and further than in most other countries.

THE MEANING OF HAPPINEESS
The word ‘happiness’ is quite complex and is not used lightly. Happiness is an aspiration of every human being, and can also be a measure of social progress. Yet, are the citizens of different countries, happy? If they are not, what, if anything, can be done about it? The key to proper measurement must begin with the meaning of the word ‘happiness’. As per the WHR 2013, the problem, of course, is that happiness is used in at least two ways :
(i) As an emotion [‘Were you happy yesterday?’], and
(ii) As an evaluation [‘Are you happy with your life as a whole?’].
If individuals were to routinely mix up their responses to these very different questions, then measures of happiness might tell us very little. Changes in reported happiness used to Track social progress would perhaps reflect little more than transient changes in emotion. Or impoverished persons who express happiness in terms of emotion might inadvertently diminish society’s will to fight poverty. Fortunately, respondents to the happiness surveys do not tend to make such confusing mistakes. Both the WHRs did show that the respondents of the surveys clearly recognise the difference between happiness as an emotion and happiness in the sense of life satisfaction.

The responses of individuals to these different questions are highly distinct. A very poor person might report himself to be happy emotionally at a specific time, while also reporting a much lower sense of happiness with life as a whole; and indeed, people living in extreme poverty do express low levels of happiness with life as a whole. Such answers should spur our societies to work harder to end extreme poverty.

The WHR is based on the primary measures of subjective well-being; life evaluations; life satisfaction; and happiness with life as a whole. Thus, happiness, appears twice, once as an emotional report, and once as part of a life evaluation, giving considerable evidence about the nature and causes of happiness in both its major senses.