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Using principal components to produce an economic and social development index: An application to Latin America and the U.S

  • Miles Cahill
  • Nicolás Sánchez
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    This paper presents a principal components methodology for determining the weights for a set of indicators in a composite index of development. The procedure is applied to a 36-variable data set consisting of 1990 data for 19 Latin American countries and corresponding 1960 and 1990 data for the individual U.S. states. This paper compares the results with other well-known indices and uses the combined data set to better understand the level and scope of development in each region and over time. The general results are that the level of development of Latin American countries in 1990 are roughly distributed over the U.S. states in 1960 (though with a larger range), and the structure of development in Latin America is similar to the U.S. Copyright International Atlantic Economic Society 2001

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    Article provided by International Atlantic Economic Society in its journal Atlantic Economic Journal.

    Volume (Year): 29 (2001)
    Issue (Month): 3 (September)
    Pages: 311-329

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    Handle: RePEc:kap:atlecj:v:29:y:2001:i:3:p:311-329
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    1. Srinivasan, T N, 1994. "Human Development: A New Paradigm or Reinvention of the Wheel?," American Economic Review, American Economic Association, vol. 84(2), pages 238-43, May.
    2. Campos, Nauro F. & Nugent, Jeffrey B., 1999. "Development Performance and the Institutions of Governance: Evidence from East Asia and Latin America," World Development, Elsevier, vol. 27(3), pages 439-452, March.
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    7. Dasgupta, Partha & Weale, Martin, 1992. "On measuring the quality of life," World Development, Elsevier, vol. 20(1), pages 119-131, January.
    8. Desai, Meghnad, 1991. "Human development : Concepts and measurement," European Economic Review, Elsevier, vol. 35(2-3), pages 350-357, April.
    9. Ravallion, Martin, 1997. "Good and bad growth: The human development reports," World Development, Elsevier, vol. 25(5), pages 631-638, May.
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