Final answer:
The Inequality-adjusted Human Development Index (IHDI) is a measure of well-being that accounts for inequalities in health, knowledge, and standard of living, and it serves as an alternative to solely financial wealth-based measures like GDP.
Step-by-step explanation:
In addition to the Human Development Index (HDI), another measure of well-being is often referred to as the Inequality-adjusted Human Development Index (IHDI). This index is derived from the HDI and includes adjustments for inequality in the dimensions of health, knowledge, and standard of living.
The IHDI, thus, accounts for how these human development achievements are distributed among the population. It considers three main dimensions: health, knowledge, and a decent standard of living, incorporating indicators such as life expectancy, educational attainment, and income levels.
By considering both gross national income (GNI) at purchasing power parity (PPP) and other non-financial factors, the IHDI paints a more comprehensive picture of well-being and societal progress than measures focused solely on financial wealth, such as GDP. The HDI and its variant, the IHDI, place people and their capabilities at the forefront of assessing economic opportunities and policies, making them vital social indicators for understanding a nation's development and quality of life.