Human Development in the EU

In its present formulation the Human Development Index (HDI) is a measure of the well-being of nations considering two fixed reference values for each indicator, the so-called fixed goals of development, as normalization parameters. As is well known, the HDI is insensitive to the relative performance of a country with respect to those of a reference group of nations. Nevertheless, several recent works on individuals’ perception of their well-being reveal that subjective well-being is positively correlated with upward mobility opportunities and negatively correlated with the persistency of well-being inequalities within a reference group. Therefore, in this paper, we suggest an easy-tohandle extension of the HDI aimed at integrating the «absolute» perspective implicit in the traditional index with a relative one. Finally, as an application of our index, we assess the well-being of nations in the EU