Question

Country X and Y have the same HDI value based on the traditional calculation however country X has a GNI per capita value of 40,000$ while country Y has a GNI per capita of 10,000. What can you say about their NHDI?

Answer 1

Both countries have same HDI but country X has more GNI per capita ($ 40,000) than country Y ($ 10,000) which means that country Y is much better in education and health as compared to country X. This can be proved by following illustration -

• Suppose the Health & Education level of country X is Hx & Ex while the health & education level of country Y is Hy & Ey
• We know that, HDI = (Health index × Education index × GNI/per capita)^1/3
• According to question, both countries have same GNI.
• Therefore, GNI of X = GNI of Y
• (Hx × Ex × 40000)^1/3 = (Hy × Ey × 10000)^1/3
• Hx × Ex × 40,000 = Hy × Ey × 10,000
• Hx × Ex × 4 = Hy × Ey
• Health & education level of country Y = 4 × health & education level of country X.

Hence, health & education level of country Y will be more (4 times) than country X.