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A Multiplicative Human Development Index

Author

Listed:
  • Herrero Carmen

    () (UNIVERSITY OF ALICANTE INSTITUTO VALENCIANO DE INVESTIGACIONES ECONÓMICAS (Ivie))

  • Martínez Rico Ricardo

    () (UNIVERSITY OF ALICANTE AND IVIE PABLO DE OLAVIDE UNIVERSITY PABLO DE OLAVIDE UNIVERSITY AND IVIE)

  • Villar Notario Antonio

    () (Pablo de Olavide University; Ivie)

Abstract

This working paper provides an axiomatic foundation of a multiplicative human development index as an alternative to the standard additive one. There are three key advantages that derive from our multiplicative formulation: one, that it is a theoretically wellfounded measure; two, that it does not impose the restriction of having a constant rate of substitution between health, education, and income; and three, that it allows the introduction of distributive considerations. We also present a comparative analysis between the additive and the multiplicative indices, using the 2006 data corresponding to 125 countries. The empirical study illustrates well how our perception of human development depends on the aggregation formula.

Suggested Citation

  • Herrero Carmen & Martínez Rico Ricardo & Villar Notario Antonio, 2008. "A Multiplicative Human Development Index," Working Papers 201099, Fundacion BBVA / BBVA Foundation.
  • Handle: RePEc:fbb:wpaper:201099
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    Cited by:

    1. Nayak, Purusottam & Mishra, SK, 2012. "Efficiency of Pena’s P2 Distance in Construction of Human Development Indices," MPRA Paper 39022, University Library of Munich, Germany.
    2. 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.
    3. Khaled Elmawazini & Gamal Atallah & Sonny Nwankwo & Yazid Dissou, 2013. "US Foreign Affiliates, Technology Diffusion and Host Country Human Development: Human Development Index versus Human Capital," Industry and Innovation, Taylor & Francis Journals, vol. 20(1), pages 69-91, January.

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    Keywords

    Multiplicative index; axiomatization.;

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