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Classification, Detection and Consequences of Data Error: Evidence from the Human Development Index

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  • Hendrik Wolff
  • Howard Chong
  • Maximilian Auffhammer

Abstract

We measure and examine data error in health, education and income statistics used to construct the Human Development Index. We identify three sources of data error which are due to (i) data updating, (ii) formula revisions and (iii) thresholds to classify a country’s development status. We propose a simple statistical framework to calculate country specific measures of data uncertainty and investigate how data error biases rank assignments. We find that up to 34% of countries are misclassified and, by replicating prior studies, we show that key estimated parameters vary by up to 100% due to data error.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 121 (2011)
Issue (Month): 553 (06)
Pages: 843-870

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Handle: RePEc:ecj:econjl:v:121:y:2011:i:553:p:843-870

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References

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  1. MORENO-TERNERO, Juan D. & ROEMER, John E., . "Impartiality, priority, and solidarity in the theory of justice," CORE Discussion Papers RP -1896, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. ?gel de la Fuente & Rafael Dom?ech, . "Human Capital In Growth Regressions: How Much Difference Does Data Quality Make?," UFAE and IAE Working Papers 446.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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Cited by:
  1. Ravallion, Martin, 2010. "Troubling tradeoffs in the Human Development Index," Policy Research Working Paper Series 5484, The World Bank.
  2. Luisa Montuschi, 2013. "Progreso social, crecimiento y bienestar," CEMA Working Papers: Serie Documentos de Trabajo. 533, Universidad del CEMA.
  3. Sevinc Rende & Murat Donduran, 2013. "Neighborhoods in Development: Human Development Index and Self-organizing Maps," Social Indicators Research, Springer, vol. 110(2), pages 721-734, January.
  4. Jeni Klugman & Francisco Rodríguez & Hyung-Jin Choi, 2011. "The HDI 2010: new controversies, old critiques," Journal of Economic Inequality, Springer, vol. 9(2), pages 249-288, June.
  5. Leo Dobes, 2012. "Adaptation to Climate Change: Formulating Policy under Uncertainty," CCEP Working Papers 1201, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.

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