Computation of Composite Index – Geography – UGC NET – Notes

• A composite index is a widely used statistical tool that combines different components and qualities into a single measure, generally applied to capture social and economic development. Social geographers have been using various social indicators to measure diverse social aspects or development scenarios, representing real-world situations a social group faces and its geographical variation.
• The Human Development Index (HDI) is a widely popular composite index constructed to measure various social and economic development dimensions in a single measure. HDI monitors the change in development distribution and identifies the group or region failing to progress in human development.

Steps in the Construction of Composite Index

Theoretical Background

• The construction of the Composite Index began with a robust theoretical framework or conceptualization of the problem. Defining a concept, i.e., a social development aspect that would be captured through a composite index, its sub-categories, and its elements must be logical, coherent and wellresearched. A composite index must be well conceived, well researched, and constituted from data that are relatively accessible, timeliness, and significant. For example, the Human Development Index comprises per capita income, education (literacy rate), and health (life expectancy in years).
• The economist, Mahbub ul Haque, who designed HDI in the 1990s had strong logic behind each component used in this composite index. HDI emphasizes a long and healthy life, being knowledgeable, and having a decent standard of living, which sufficiently captures the key essences of quality of life and societal well-being and must reflect if society and the economy are developing.