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Optimizing the new formulation of the United Nations' human development index: An empirical view from data envelopment analysis

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  • Stéphane Blancard

    ()
    (Agrosup Dijon, CESAER)

  • Jean-François Hoarau

    ()
    (CEMOI, University of La Reunion)

Abstract

In this paper, we propose a new way to simulate an optimal Human Development Index [HDI]. Indeed, the formulation of the original HDI established by the United Nations Development Programme [UNDP] relies on a major methodological shortcoming, namely the contestable assumption that all component indices have the same weights. So, we implement a new approach to determine the optimal weights of each sub-indicator in the light of Data Envelopment Analysis [DEA]. Accordingly, we follow the multiplicative optimization approach introduced by Zhou et al. (2010), to assess robustly the relative performance of a set of 169 economies around the world in terms of human development. Finally, the new world ranking is close to and highly correlated with the standard HDI one, giving then some support to the equal weighting method adopted by the UNDP.

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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 31 (2011)
Issue (Month): 1 ()
Pages: 989-1003

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Handle: RePEc:ebl:ecbull:eb-10-00809

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Keywords: Human development index; data envelopment analysis; multiplicative optimization approach; optimal weights;

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References

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  1. Shyamal Chowdhury & Lyn Squire, 2006. "Setting weights for aggregate indices: An application to the commitment to development index and human development index," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 42(5), pages 761-771.
  2. Hicks, Norman & Streeten, Paul, 1979. "Indicators of development: The search for a basic needs yardstick," World Development, Elsevier, Elsevier, vol. 7(6), pages 567-580, June.
  3. Sagar, Ambuj D. & Najam, Adil, 1998. "The human development index: a critical review," Ecological Economics, Elsevier, Elsevier, vol. 25(3), pages 249-264, June.
  4. Laurens Cherchye & Erwin Oghe & Tom Van Puyenbroeck, 2005. "Robust human development rankings," Public Economics Working Paper Series, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics ces0516, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
  5. Valeria Costantini & Salvatore Monni, 2005. "Sustainable Human Development for European Countries," Journal of Human Development and Capabilities, Taylor & Francis Journals, Taylor & Francis Journals, vol. 6(3), pages 329-351.
  6. Nourry, Myriam, 2008. "Measuring sustainable development: Some empirical evidence for France from eight alternative indicators," Ecological Economics, Elsevier, Elsevier, vol. 67(3), pages 441-456, October.
  7. Ebert, Udo & Welsch, Heinz, 2004. "Meaningful environmental indices: a social choice approach," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 47(2), pages 270-283, March.
  8. Zhou, P. & Ang, B.W. & Poh, K.L., 2007. "A mathematical programming approach to constructing composite indicators," Ecological Economics, Elsevier, Elsevier, vol. 62(2), pages 291-297, April.
  9. P. Zhou & B. Ang & D. Zhou, 2010. "Weighting and Aggregation in Composite Indicator Construction: a Multiplicative Optimization Approach," Social Indicators Research, Springer, Springer, vol. 96(1), pages 169-181, March.
  10. M.C. de la Vega & A.M. Urrutia, 2001. "HDPI: A Framework for Pollution-Sensitive Human Development Indicators," Environment, Development and Sustainability, Springer, Springer, vol. 3(3), pages 199-215, September.
  11. Hatefi, S.M. & Torabi, S.A., 2010. "A common weight MCDA-DEA approach to construct composite indicators," Ecological Economics, Elsevier, Elsevier, vol. 70(1), pages 114-120, November.
  12. Srinivasan, T N, 1994. "Human Development: A New Paradigm or Reinvention of the Wheel?," American Economic Review, American Economic Association, American Economic Association, vol. 84(2), pages 238-43, May.
  13. Hezri, Adnan A. & Dovers, Stephen R., 2006. "Sustainability indicators, policy and governance: Issues for ecological economics," Ecological Economics, Elsevier, Elsevier, vol. 60(1), pages 86-99, November.
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Cited by:
  1. Chris Tofallis, 2013. "An automatic-democratic approach to weight setting for the new human development index," Journal of Population Economics, Springer, Springer, vol. 26(4), pages 1325-1345, October.
  2. Sevinc Rende & Murat Donduran, 2013. "Neighborhoods in Development: Human Development Index and Self-organizing Maps," Social Indicators Research, Springer, Springer, vol. 110(2), pages 721-734, January.

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