Why has the principle of “diminishing returns” not been applied to other indicators?
There are arguments for and against transforming the health and education variables to account for diminishing returns. It is true that health and education are not only of intrinsic value; they, like income, are instrumental to other dimensions of human development not included in the HDI (Sen, 1999). Thus, their ability to be converted into other ends may likewise incur diminishing returns. The approach is to value each year of age or education equally, and therefore the principle has been applied only to the income indicator.