IDEAS home Printed from https://ideas.repec.org/p/got/gotcrc/037.html
   My bibliography  Save this paper

On weighting the components of the Human Development Index: A statistical justification

Author

Listed:
  • Georges Nguefack-Tsague

    (University of Yaoundé I, Cameroon)

  • Stephan Klasen

    (Georg-August-University Göttingen)

  • Walter Zucchini

    (Georg-August-University Göttingen)

Abstract

The Human Development Index (HDI) published in the Human Development Report (HDR) of the United Nations Development Program is calculated as a simple average of the Life Expectancy Index (LEI), the Education Index (EI) and the Gross Domestic Product Index (GDPI). This paper provides statistical support for the use of this seemingly arbitrary equal weighting of the three components by treating human development as a latent concept imperfectly captured by its three component indices. We show that a principal component analysis (PCA) based on the correlation matrix of the components leads to practically the same weights. Specifically we show that, for the period 1975 to 2005, the first principal component accounts for between 78% and 90% of the total variability in the data, and that its coefficients are positive and nearly equal. By normalizing the coefficients, the simple average weighting (1/3, 1/3, 1/3) scheme is obtained. The ranks of countries obtained using the PCA weightings are very similar to those based on the HDI. An advantage of the simple equal weighting is that one can define a simple index to measure the balance of a country\'s development, given its HDI which we show below.

Suggested Citation

  • Georges Nguefack-Tsague & Stephan Klasen & Walter Zucchini, 2010. "On weighting the components of the Human Development Index: A statistical justification," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 37, Courant Research Centre PEG.
  • Handle: RePEc:got:gotcrc:037
    as

    Download full text from publisher

    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_37.pdf
    Download Restriction: no

    Other versions of this item:

    More about this item

    Keywords

    Human Development Index; Human Development Report; United Nations Development Program; principal component analysis; correlation matrix;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:got:gotcrc:037. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dominik Noe). General contact details of provider: http://www.uni-goettingen.de/en/82144.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.