Whose values does the HDI reflect? Evidence from a discrete choice experiment in Tanzania

Multidimensional development indices such as the Human Development Index (HDI) embed value judgements about trade-offs between dimensions. Yet these are rarely tested against the valuations of the people they describe. We use a pictogram-assisted discrete choice experiment with 361 respondents in Tanzania’s Dodoma region to elicit trade-offs between income, schooling, and life expectancy. We estimate preferences using the 264 respondents who make compensatory choices and compare their valuations with the equal-weight trade-offs embedded in the HDI. The typical respondent values an additional year of schooling more highly than an additional year of life expectancy, consistent with the HDI’s qualitative ranking of dimensions. However, the implied schooling-life expectancy value ratio is around 1.5, compared with 7.2 under the HDI at Tanzania’s observed achievement levels. Allowing for observed and unobserved preference heterogeneity reveals substantial variation in valuations across respondents, which provides little support for treating any single weighting scheme as representative of this population’s valuations. The results show that the value judgements embedded in multidimensional indices can be tested empirically, and that even in a small, geographically concentrated sample the trade-offs implied by the HDI differ markedly from respondents’ valuations.