IDEAS home Printed from https://ideas.repec.org/a/eee/soceps/v87y2023ipas0038012123000162.html
   My bibliography  Save this article

Let the data speak about the cut-off values for multidimensional index: Classification of human development index with machine learning

Author

Listed:
  • Wang, Hanjie
  • Feil, Jan-Henning
  • Yu, Xiaohua

Abstract

The Human Development Index (HDI) classification is essential as it relates to international aid policies and business strategies. Although the existing literature has criticized the arbitrariness of cut-off values of the HDI, few proposed an ideal approach to overcome this drawback. This paper first employs the unsupervised machine learning techniques, the K-means clustering and Partitioning Around Medoids algorithms, to cluster the HDI and offers more reasonable cut-off values for classifying countries in combination with the current HDI calculation method. The results indicate that we can group the countries worldwide into three clusters, given the 2018 HDI dataset. We suggest cut-off values of 0.65 and 0.85 to classify low, medium, and high human development countries. This paper provides a new perspective to classifying the HDI based on the similarity of countries’ development but not subjective judgments.

Suggested Citation

  • Wang, Hanjie & Feil, Jan-Henning & Yu, Xiaohua, 2023. "Let the data speak about the cut-off values for multidimensional index: Classification of human development index with machine learning," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    • Handle: RePEc:eee:soceps:v:87:y:2023:i:pa:s0038012123000162
    DOI: 10.1016/j.seps.2023.101523
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0038012123000162
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.seps.2023.101523?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Suman Seth, 2009. "Inequality, Interactions, and Human Development," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 10(3), pages 375-396.
    2. Emanuele Felice & Michelangelo Vasta, 2015. "Passive modernization? The new human development index and its components in Italy's regions (1871–2007)," European Review of Economic History, European Historical Economics Society, vol. 19(1), pages 44-66.
    3. 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, June.
    4. Blancard, Stéphane & Hoarau, Jean-François, 2013. "A new sustainable human development indicator for small island developing states: A reappraisal from data envelopment analysis," Economic Modelling, Elsevier, vol. 30(C), pages 623-635.
    5. Kubiszewski, Ida & Costanza, Robert & Franco, Carol & Lawn, Philip & Talberth, John & Jackson, Tim & Aylmer, Camille, 2013. "Beyond GDP: Measuring and achieving global genuine progress," Ecological Economics, Elsevier, vol. 93(C), pages 57-68.
    6. Mustafa, Ghulam & Rizov, Marian & Kernohan, David, 2017. "Growth, human development, and trade: The Asian experience," Economic Modelling, Elsevier, vol. 61(C), pages 93-101.
    7. Chris Tofallis, 2013. "An automatic-democratic approach to weight setting for the new human development index," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1325-1345, October.
    8. Wang, Hanjie & Maruejols, Lucie & Yu, Xiaohua, 2021. "Predicting energy poverty with combinations of remote-sensing and socioeconomic survey data in India: Evidence from machine learning," Energy Economics, Elsevier, vol. 102(C).
    9. Neumayer, Eric, 2001. "The human development index and sustainability -- a constructive proposal," Ecological Economics, Elsevier, vol. 39(1), pages 101-114, October.
    10. Pinar, Mehmet & Stengos, Thanasis & Topaloglou, Nikolas, 2017. "Testing for the implicit weights of the dimensions of the Human Development Index using stochastic dominance," Economics Letters, Elsevier, vol. 161(C), pages 38-42.
    11. Robert Costanza & Ida Kubiszewski & Enrico Giovannini & Hunter Lovins & Jacqueline McGlade & Kate E. Pickett & Kristín Vala Ragnarsdóttir & Debra Roberts & Roberto De Vogli & Richard Wilkinson, 2014. "Development: Time to leave GDP behind," Nature, Nature, vol. 505(7483), pages 283-285, January.
    12. Mark McGillivray & Howard White, 1993. "Measuring development? The UNDP's human development index," Journal of International Development, John Wiley & Sons, Ltd., vol. 5(2), pages 183-192, March.
    13. Qiu, Qihua & Sung, Jaesang & Davis, Will & Tchernis, Rusty, 2018. "Using spatial factor analysis to measure human development," Journal of Development Economics, Elsevier, vol. 132(C), pages 130-149.
    14. Gupta, Prashant & Mallick, Sushanta & Mishra, Tapas, 2018. "Does social identity matter in individual alienation? Household-level evidence in post-reform India," World Development, Elsevier, vol. 104(C), pages 154-172.
    15. Koen Decancq & María Ana Lugo, 2013. "Weights in Multidimensional Indices of Wellbeing: An Overview," Econometric Reviews, Taylor & Francis Journals, vol. 32(1), pages 7-34, January.
    16. Shyamal Chowdhury & Lyn Squire, 2006. "Setting weights for aggregate indices: An application to the commitment to development index and human development index," Journal of Development Studies, Taylor & Francis Journals, vol. 42(5), pages 761-771.
    17. Carmen Herrero & Ricardo Mart�nez & Antonio Villar, 2012. "A Newer Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 13(2), pages 247-268, May.
    18. Sushanta K. Mallick, 2014. "Disentangling the Poverty Effects of Sectoral Output, Prices, and Policies in India," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 773-801, December.
    19. Jeni Klugman & Francisco Rodríguez & Hyung-Jin Choi, 2011. "The HDI 2010: new controversies, old critiques," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 249-288, June.
    20. Milenkovic, Nemanja & Vukmirovic, Jovanka & Bulajic, Milica & Radojicic, Zoran, 2014. "A multivariate approach in measuring socio-economic development of MENA countries," Economic Modelling, Elsevier, vol. 38(C), pages 604-608.
    21. Linden McBride & Austin Nichols, 2018. "Retooling Poverty Targeting Using Out-of-Sample Validation and Machine Learning," The World Bank Economic Review, World Bank, vol. 32(3), pages 531-550.
    22. Omrani, Hashem & Alizadeh, Arash & Amini, Mohaddeseh, 2020. "A new approach based on BWM and MULTIMOORA methods for calculating semi-human development index: An application for provinces of Iran," Socio-Economic Planning Sciences, Elsevier, vol. 70(C).
    23. 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 & Francis Journals, vol. 12(2), pages 183-202.
    24. Saltzman, Bennett & Yung, Julieta, 2018. "A machine learning approach to identifying different types of uncertainty," Economics Letters, Elsevier, vol. 171(C), pages 58-62.
    25. Graskemper, Viktoria & Yu, Xiaohua & Feil, Jan-Henning, 2021. "Farmer typology and implications for policy design – An unsupervised machine learning approach," Land Use Policy, Elsevier, vol. 103(C).
    26. T. Krishna Kumar & Sushanta Mallick & Jayarama Holla, 2009. "Estimating Consumption Deprivation in India Using Survey Data: A State-Level Rural-Urban Analysis Before and During Reform Period," Journal of Development Studies, Taylor & Francis Journals, vol. 45(4), pages 441-470.
    27. Qiyan Zeng & Xiaofu Chen, 2022. "Identification of urban-rural integration types in China – an unsupervised machine learning approach," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 15(2), pages 400-415, September.
    28. Maria Emma Santos & Pablo Villatoro, 2018. "A Multidimensional Poverty Index for Latin America," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(1), pages 52-82, March.
    29. Chang Liu & Lin Zhou & Lisa Höschle & Xiaohua Yu, 2022. "Food price dynamics and regional clusters: machine learning analysis of egg prices in China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 15(2), pages 416-432, September.
    30. Lucie Maruejols & Hanjie Wang & Qiran Zhao & Yunli Bai & Linxiu Zhang, 2022. "Comparison of machine learning predictions of subjective poverty in rural China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 15(2), pages 379-399, September.
    31. Sardar Islam & Matthew Clarke, 2002. "The Relationship between Economic Development and Social Welfare: A New Adjusted GDP Measure of Welfare," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 57(2), pages 201-229, February.
    32. Sagar, Ambuj D. & Najam, Adil, 1998. "The human development index: a critical review," Ecological Economics, Elsevier, vol. 25(3), pages 249-264, June.
    33. Oladipo Olalekan David, 2019. "Powering economic growth and development in Africa: telecommunication operations," Applied Economics, Taylor & Francis Journals, vol. 51(33), pages 3583-3607, July.
    34. Jad Chaaban & Alexandra Irani & Alexander Khoury, 2016. "The Composite Global Well-Being Index (CGWBI): A New Multi-Dimensional Measure of Human Development," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(1), pages 465-487, October.
    35. Frances Stewart, 2019. "The Human Development Approach: An Overview," Oxford Development Studies, Taylor & Francis Journals, vol. 47(2), pages 135-153, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Hanjie & Yu, Xiaohua, 2023. "Carbon dioxide emission typology and policy implications: Evidence from machine learning," China Economic Review, Elsevier, vol. 78(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giménez, Víctor & Ayvar-Campos, Francisco Javier & Navarro-Chávez, José César Lenin, 2017. "Efficiency in the generation of social welfare in Mexico: A proposal in the presence of bad outputs," Omega, Elsevier, vol. 69(C), pages 43-52.
    2. Panagiotis Ravanos & Giannis Karagiannis, 2021. "A VEA Benefit-of-the-Doubt Model for the HDI," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(1), pages 27-46, May.
    3. Diogo Ferraz & Enzo B. Mariano & Daisy Rebelatto & Dominik Hartmann, 2020. "Linking Human Development and the Financial Responsibility of Regions: Combined Index Proposals Using Methods from Data Envelopment Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(2), pages 439-478, July.
    4. Albino Prada & Patricio Sánchez-Fernández, 2019. "Transforming Economic Growth into Inclusive Development: An International Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(1), pages 437-457, August.
    5. Chris Tofallis, 2013. "An automatic-democratic approach to weight setting for the new human development index," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1325-1345, October.
    6. Mehmet Pinar, 2019. "Multidimensional Well-Being and Inequality Across the European Regions with Alternative Interactions Between the Well-Being Dimensions," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(1), pages 31-72, July.
    7. Suman Seth & Antonio Villar, 2014. "Human Development, Inequality and Poverty: empirical findings," Working Papers 14.11, Universidad Pablo de Olavide, Department of Economics.
    8. Rogge, Nicky, 2018. "Composite indicators as generalized benefit-of-the-doubt weighted averages," European Journal of Operational Research, Elsevier, vol. 267(1), pages 381-392.
    9. Rui Fragoso & Vladimir Bushenkov & Carlos Marques, 2012. "Integrated Water Management Using Feasible Goals Method and Interactive Decision Maps: The Case of Odivelas Irrigation," CEFAGE-UE Working Papers 2012_07, University of Evora, CEFAGE-UE (Portugal).
    10. Elsa Vaz & José Belbute & António Caleiro & Gertrudes Guerreiro & Ana Eduardo, 2012. "Comparative Analysis of Regional Input-Output Matrices: the Portuguese case," CEFAGE-UE Working Papers 2012_08, University of Evora, CEFAGE-UE (Portugal).
    11. Ludovico Carrino, 2016. "Data Versus Survey-based Normalisation in a Multidimensional Analysis of Social Inclusion," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(3), pages 305-345, November.
    12. Suman Seth and Antonio Villar, 2017. "Measuring Human Development and Human Deprivations," OPHI Working Papers ophiwp110.pdf, Queen Elizabeth House, University of Oxford.
    13. Wang, Hanjie & Yu, Xiaohua, 2023. "Carbon dioxide emission typology and policy implications: Evidence from machine learning," China Economic Review, Elsevier, vol. 78(C).
    14. Gertrudes Saúde Guerreiro, 2014. "Regional Income Convergence in Portugal (1991–2002)," Research on Economic Inequality, in: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting, volume 22, pages 351-381, Emerald Group Publishing Limited.
    15. Paulo R. Silva & Elisabete G.S. Félix, 2012. "Challenges of the Information Economy: Asymmetry of Information in the Information Society," CEFAGE-UE Working Papers 2012_15, University of Evora, CEFAGE-UE (Portugal).
    16. Paulo Ferreira & Andreia Dionísio, 2012. "An application of General Maximum Entropy to Utility," CEFAGE-UE Working Papers 2012_18, University of Evora, CEFAGE-UE (Portugal).
    17. Anabela Schinck & Soumodip Sarkar, 2012. "Financial Bootstrapping: a critical entrepreneurship skill," CEFAGE-UE Working Papers 2012_20, University of Evora, CEFAGE-UE (Portugal).
    18. Nicola Amendola & Giacomo Gabbuti & Giovanni Vecchi, 2023. "On some problems of using the Human Development Index in economic history," European Review of Economic History, European Historical Economics Society, vol. 27(4), pages 477-505.
    19. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.
    20. Maria Jeus & Pedro Henriques & Pedro Laranjeira & Vanda Narciso & Maria Leonor da Silva Carvalho, 2012. "The impact of shifting cultivation in the forestry ecosystems of Timor-Leste," CEFAGE-UE Working Papers 2012_16, University of Evora, CEFAGE-UE (Portugal).

    More about this item

    Keywords

    Human development; Cut-off values; Unsupervised machine learning; K-means clustering; PAM;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:soceps:v:87:y:2023:i:pa:s0038012123000162. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/seps .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.