Abstract
Research background: Composite indicators are commonly used as an approximation tool to measure economic development, the standard of living, competitiveness, fairness, effectiveness, and many others being willingly implemented into many different research disciplines. However, it seems that in most cases, the variable weighting procedure is avoided or erroneous since, in most cases, the so-called ?weights by belief? are applied. As research show, it can be frequently observed that weights do not equal importance in composite indicators. As a result, biased rankings or grouping of objects are obtained.
 Purpose of the article: The primary purpose of this article is to optimise and improve the Human Development Index, which is the most commonly used composite indicator to rank countries in terms of their socio-economic development. The optimisation will be done by re-scaling the current weights, so they will express the real impact of every single component taken into consideration during HDI?s calculation process.
 Methods: In order to achieve the purpose mentioned above, the sensitivity analysis tools (mainly the first-order sensitivity index) were used to determine the appropriate weights in the Human Development Index. In the HDI?s resilience evaluation process, the Monte Carlo simulations and full-Bayesian Gaussian processes were applied. Based on the adjusted weights, a new ranking of countries was established and compiled with the initial ranking using, among others, Kendall tau correlation coefficient.
 Findings & Value added: Based on the data published by UNDP for 2017, it has been shown that the Human Development Index is built incorrectly by putting equal weights for all of its components. The weights proposed by the sensitivity analysis better reflect the actual contribution of individual factors to HDI variability. Re-scaled Human Development Index constructed based on proposed weights allow for better differentiation of countries due to their socio-economic development.
Highlights
The Human Development Index is probably the most prominent composite indicator ever used
As one can read at the UNDP website, ‘The HDI was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone’ (UNDP, 2019)
The data set include statistics concerning 189 countries. As it was mentioned before, the Human Development Index is currently calculated as a geometric mean of three sub-indices
Summary
The Human Development Index is probably the most prominent composite indicator ever used. This well-known index was created in 1990 by the United Nations Development Programme and since has been published every year. As one can read at the UNDP website, ‘The HDI was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone’ (UNDP, 2019). It is often classified as a measure ‘replacing GDP’, and it ought to quantify social progress in a more direct way than GDP. According to Ravallion (2010, pp. 1–32), many composite indicators were build being constrained only by data availability, ending up a set of processed data without useful meaning
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