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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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File URL: http://www.nber.org/papers/w16572.pdf
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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16572.

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Date of creation: Dec 2010
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Publication status: published as Hendrik Wolff & Howard Chong & Maximilian Auffhammer, 2011. "Classification, Detection and Consequences of Data Error: Evidence from the Human Development Index," Economic Journal, Royal Economic Society, vol. 121(553), pages 843-870, 06.
Handle: RePEc:nbr:nberwo:16572

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  1. de la Fuente, Angel & Doménech, Rafael, 2000. "Human Capital In Growth Regressions: How Much Difference Does Data Quality Make?," CEPR Discussion Papers 2466, C.E.P.R. Discussion Papers.
  2. Juan D Moreno-Ternero & John E Roemer, 2006. "Impartiality, Priority, and Solidarity in the Theory of Justice," Econometrica, Econometric Society, vol. 74(5), pages 1419-1427, 09.
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Cited by:
  1. 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.
  2. Luisa Montuschi, 2013. "Progreso social, crecimiento y bienestar," CEMA Working Papers: Serie Documentos de Trabajo. 533, Universidad del CEMA.
  3. 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.
  4. 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.
  5. Ravallion, Martin, 2012. "Troubling tradeoffs in the Human Development Index," Journal of Development Economics, Elsevier, vol. 99(2), pages 201-209.

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