Understanding the 2010 Human Development Index Calculation

Each year, the United Nation’s Development Program (UNDP) publishes the Human Development Index (HDI), which is a composite index that offers a method of evaluating international human development not only by economic advances but also in terms of the capabilities of individuals within a country. This study investigates the origin of the diminishing returns to HDI, given its important implications for climate policy and development. Specifically, we examine the current HDI calculation procedure to determine if the observed relationship is a factor of dimension normalization and/or aggregation within the HDI calculation.