Revised Human Development Index

This paper is a case study of HDI where the ASEAN countries were used as the subject of analysis and the OECD countries were used as a comparison group. We propose to revise the current human development index. HDI employs three components to measure human development, namely life expectancy, education and the standard of living. Each component is accorded equal weight of 0.33. In light of the current UNDP’s sustainable development goals (SDG) detailing 17 factors, HDI becomes out of date and in need of revision. We mapped the current HDI to SDG and found that social governance emerges as the fourth factor in assessing human development. The data used consists of the HDI and SGD reading of 35 countries from the OECD and 10 ASEAN countries. The 17 factors of SDG were scored as binary data (1,0) in order to obtain the probability of the factors fallen into each category of development component. We found that our recalculation of HDI components and their weight to be: life expectancy (0.23), literacy (0.23), per capita GDP (0.25), and social governance (0.29). This finding is an evidence to support the attempt to improve existing literature in HDI studies.JEL Code: B12, B13, C10, F6