On weighting the components of the Human Development Index: A statistical justification
AbstractThe Human Development Index (HDI) published in the Human Development Report (HDR) of the United Nations Development Program is calculated as a simple average of the Life Expectancy Index (LEI), the Education Index (EI) and the Gross Domestic Product Index (GDPI). This paper provides statistical support for the use of this seemingly arbitrary equal weighting of the three components by treating human development as a latent concept imperfectly captured by its three component indices. We show that a principal component analysis (PCA) based on the correlation matrix of the components leads to practically the same weights. Specifically we show that, for the period 1975 to 2005, the first principal component accounts for between 78% and 90% of the total variability in the data, and that its coefficients are positive and nearly equal. By normalizing the coefficients, the simple average weighting (1/3, 1/3, 1/3) scheme is obtained. The ranks of countries obtained using the PCA weightings are very similar to those based on the HDI. An advantage of the simple equal weighting is that one can define a simple index to measure the balance of a country\'s development, given its HDI which we show below.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 37.
Date of creation: 15 Jul 2010
Date of revision:
Contact details of provider:
Postal: Platz der Goettinger Sieben 3; D-37073 Goettingen, GERMANY
Phone: +49 551 39 14066
Fax: + 49 551 39 14059
Web page: http://www.uni-goettingen.de/en/82144.html
Human Development Index; Human Development Report; United Nations Development Program; principal component analysis; correlation matrix;
Other versions of this item:
- Georges Nguefack-Tsague & Stephan Klasen & Walter Zucchini, 2011. "On Weighting the Components of the Human Development Index: A Statistical Justification," Journal of Human Development and Capabilities, Taylor and Francis Journals, vol. 12(2), pages 183-202.
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-06 (All new papers)
- NEP-HAP-2010-08-06 (Economics of Happiness)
- NEP-HRM-2010-08-06 (Human Capital & Human Resource Management)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Koen Decancq & Luc Van Ootegem & Elsy Verhofstadt, 2011.
"What if we voted on the weights of a multidimensional well-being index? An illustration with Flemish data,"
1110, Herman Deleeck Centre for Social Policy, University of Antwerp.
- K. Decancq & L. Van Ootegem & E. Verhofstadt, 2011. "What If We Voted On The Weights Of A Multidimensional Well-Being Index? An Illustration With Flemish Data," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/762, Ghent University, Faculty of Economics and Business Administration.
- Kenneth Harttgen & Stephan Klasen, 2010.
"A Household-Based Human Development Index,"
Human Development Research Papers (2009 to present)
HDRP-2010-22, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
- Harttgen, Kenneth & Klasen, Stephan, 2010. "A household-based Human Development Index," Proceedings of the German Development Economics Conference, Hannover 2010 30, Verein für Socialpolitik, Research Committee Development Economics.
- Stephen Morse, 2013. "Bottom Rail on Top: The Shifting Sands of Sustainable Development Indicators as Tools to Assess Progress," Sustainability, MDPI, Open Access Journal, vol. 5(6), pages 2421-2441, May.
- 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.
- Jeni Klugman & Francisco Rodríguez & Hyung-Jin Choi, 2011. "The HDI 2010: New Controversies, Old Critiques," Human Development Research Papers (2009 to present) HDRP-2011-01, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
- Philipp Kolo, 2012. "Measuring a New Aspect of Ethnicity - The Appropriate Diversity Index," Ibero America Institute for Econ. Research (IAI) Discussion Papers 221, Ibero-America Institute for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dominik Noe).
If references are entirely missing, you can add them using this form.