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Broad-based index for measurement of development

Author

Listed:
  • Sayel Basel

    (Sri Sathya Sai Institute of Higher Learning)

  • K. U. Gopakumar

    (Sri Sathya Sai Institute of Higher Learning)

  • R. Prabhakara Rao

    (Sri Sathya Sai Institute of Higher Learning)

Abstract

Measurement of development is important for economists, academicians and policy makers as it deals with broader issues such as satisfaction of basic human needs and goals, well-being, environment protection and of course economic growth. There have been several attempts to construct various indices for measuring development ever since the use of growth in GDP was found to be inadequate. While the use of composite indices was a significant step in this direction, the existing ones are widely criticized on its limited scope while capturing the various dimensions of development process. Moreover, they also lacked in its methodology of aggregation and weighting scheme, where equal weights for its components were taken in most of the cases. In this study, we make an attempt to construct a broad-based development index (BBDI) capturing the overall development process under various dimensions such as society, sustainability, economy and institutions. Apart from its wide coverage, our index is also different from the existing ones in terms of its weighting, where we have used principal component analysis for deriving the variable weights. BBDI is then aggregated for 102 countries measuring their development process from 1996 through 2015.

Suggested Citation

  • Sayel Basel & K. U. Gopakumar & R. Prabhakara Rao, 2020. "Broad-based index for measurement of development," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 22(1), pages 182-206, June.
    • Handle: RePEc:spr:jsecdv:v:22:y:2020:i:1:d:10.1007_s40847-020-00093-2
    DOI: 10.1007/s40847-020-00093-2
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    More about this item

    Keywords

    Measurement of development; Broad-based development index; Principal component analysis; Sustainable development;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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