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Measuring human development index: The old, the new and the elegant

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  • Srijit Mishra

    ()
    (Indira Gandhi Institute of Development Research)

  • Hippu Slak Kristle Nathan

    ()
    (National Institute of Advanced Studies)

Abstract

The Human Development Index (HDI) is calculated using normalized indicators from three dimensions- health, education, and standard of living (or income). This paper evaluates three aggregation methods of computing HDI using a set of axioms. The old measure of HDI taking a linear average of the three dimensions satisfies monotonicity, anonymity, and normalization (or MAN) axioms. The current geometric mean approach additionally satisfies the axioms of uniformity, which penalizes unbalanced or skewed development across dimensions. We propose an alternative measure, where HDI is the additive inverse of the distance from the ideal. This measure, in addition to the above-mentioned axioms, also satisfies shortfall sensitivity (the emphasis on the neglected dimension should be at least in proportion to the shortfall) and hiatus sensitivity to level (higher overall attainment must simultaneously lead to reduction in gap across dimensions). An acronym of these axioms is MANUSH, which incidentally means human in some of the South Asians languages and the alphabets can also be rearranged to denote HUMANS. Using Minkowski distance function we also give an à-class of measures, special cases of which turn out to be the old linear averaging method (à=1) and our proposed displaced ideal measure (à=2) and when àò2 then these class of measures also satisfy the MANUSH axioms.

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Bibliographic Info

Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2013-020.

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Length: 33 pages
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:ind:igiwpp:2013-020

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Keywords: Displaced ideal; Euclidean distance; Geometric mean; Hiatus sensitivity to level; Linear averaging; MANUSH; Minkowski distance; Shortfall sensitivity; Uniform development;

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References

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  1. Gustav Ranis & Frances Stewart & Emma Samman, 2006. "Human Development: Beyond the Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 7(3), pages 323-358.
  2. Gustav Ranis, Frances Stewart and Emma Samman, . "Human Development: beyond the HDI," QEH Working Papers qehwps135, Queen Elizabeth House, University of Oxford.
  3. Hippu Salk Kristle Nathan & Srijit Mishra, 2012. "Group differential for attainment and failure," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-026, Indira Gandhi Institute of Development Research, Mumbai, India.
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  5. Hippu Salk Kristle Nathan & Srijit Mishra, 2010. "Progress in Human Development - Are we on the right path?," Development Economics Working Papers 23019, East Asian Bureau of Economic Research.
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  16. Grimm, Michael & Harttgen, Kenneth & Klasen, Stephan & Misselhorn, Mark, 2008. "A Human Development Index by Income Groups," World Development, Elsevier, vol. 36(12), pages 2527-2546, December.
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