A composite indicator used to rank countries based on their level of human development, encompassing factors such as life expectancy, education, and per capita income, providing a more comprehensive measure than solely economic indicators. For instance, a nation with a high gross domestic product (GDP) might still have a lower ranking on this scale if its citizens experience significantly lower life expectancy or educational attainment compared to nations with similar income levels.
The significance of this metric lies in its ability to highlight disparities between economic prosperity and the well-being of a nation’s populace. It serves as a crucial tool for policymakers and researchers to identify areas where targeted interventions can improve the quality of life. Historically, its development represented a shift in focus from purely economic growth to a more holistic view of progress, emphasizing human potential and capabilities.