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Measuring human development index: The old, the new and the elegant

  • Srijit Mishra

    ()

    (Indira Gandhi Institute of Development Research)

  • Hippu Slak Kristle Nathan

    ()

    (National Institute of Advanced Studies)

The Human Development Index (HDI) is calculated using normalized indicators from three dimensions- health, education, and standard of living (or income). This paper evaluates three aggregation methods of computing HDI using a set of axioms. The old measure of HDI taking a linear average of the three dimensions satisfies monotonicity, anonymity, and normalization (or MAN) axioms. The current geometric mean approach additionally satisfies the axioms of uniformity, which penalizes unbalanced or skewed development across dimensions. We propose an alternative measure, where HDI is the additive inverse of the distance from the ideal. This measure, in addition to the above-mentioned axioms, also satisfies shortfall sensitivity (the emphasis on the neglected dimension should be at least in proportion to the shortfall) and hiatus sensitivity to level (higher overall attainment must simultaneously lead to reduction in gap across dimensions). An acronym of these axioms is MANUSH, which incidentally means human in some of the South Asians languages and the alphabets can also be rearranged to denote HUMANS. Using Minkowski distance function we also give an à-class of measures, special cases of which turn out to be the old linear averaging method (à=1) and our proposed displaced ideal measure (à=2) and when àò2 then these class of measures also satisfy the MANUSH axioms.

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Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2013-020.

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Length: 33 pages
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:ind:igiwpp:2013-020
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  1. Michael Grimm & Kenneth Harttgen & Stephan Klasen & Mark Misselhorn, 2007. "A Human Development Index by Income Groups," Ibero America Institute for Econ. Research (IAI) Discussion Papers 155, Ibero-America Institute for Economic Research.
  2. Srijit Mishra, 2006. "On measuring group-differentials displayed by socio-economic indicators: An Extension," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2006-005, Indira Gandhi Institute of Development Research, Mumbai, India.
  3. Hippu Salk Kristle Nathan & Srijit Mishra, 2010. "Progress in human development: Are we on the right path?," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 3(3), pages 199-221.
  4. Gustav Ranis & Frances Stewart & Emma Samman, 2005. "Human Development: Beyond the HDI," Working Papers 916, Economic Growth Center, Yale University.
  5. Carmen Herrero & Ricardo Martínez & Antonio Villar, 2010. "Multidimensional Social Evaluation: An Application To The Measurement Of Human Development," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(3), pages 483-497, 09.
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  8. Gustav Ranis, Frances Stewart and Emma Samman, . "Human Development: beyond the HDI," QEH Working Papers qehwps135, Queen Elizabeth House, University of Oxford.
  9. Srijit Mishra & Hippu Salk Kristle Nathan & B. Sudhakara Reddy, 2009. "An Alternative Approach to Measure HDI," Working Papers id:2069, eSocialSciences.
  10. Hopkins, Michael, 1991. "Human development revisited: A new UNDP report," World Development, Elsevier, vol. 19(10), pages 1469-1473, October.
  11. James Foster & Luis Lopez-Calva & Miguel Szekely, 2005. "Measuring the Distribution of Human Development: methodology and an application to Mexico," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 6(1), pages 5-25.
  12. Hippu Salk Kristle Nathan & Srijit Mishra, 2012. "Group differential for attainment and failure," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-026, Indira Gandhi Institute of Development Research, Mumbai, India.
  13. Gustav Ranis & Frances Stewart & Emma Samman, 2006. "Human Development: Beyond the Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 7(3), pages 323-358.
  14. Sudhir Anand & Amartya Sen, 2000. "The Income Component of the Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 1(1), pages 83-106.
  15. Ramakrushna Panigrahi & Sashi Sivramkrishna, 2002. "An Adjusted Human Development Index: Robust Country Rankings with Respect to the Choice of Fixed Maximum and Minimum Indicator Values," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 3(2), pages 301-311.
  16. Shoutir Kishore Chatterjee, 2005. "Measurement of Human Development: an alternative approach," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 6(1), pages 31-44.
  17. Luchters, Guido & Menkhoff, Lukas, 1996. "Human development as statistical artifact," World Development, Elsevier, vol. 24(8), pages 1385-1392, August.
  18. Sagar, Ambuj D. & Najam, Adil, 1998. "The human development index: a critical review," Ecological Economics, Elsevier, vol. 25(3), pages 249-264, June.
  19. P. Palazzi & A. Lauri, 1998. "The Human Development Index: suggested corrections," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(205), pages 193-221.
  20. Carmen Herrero & Ricardo Martínez & Antonio Villar, 2010. "Improving the Measurement of Human Development," Human Development Research Papers (2009 to present) HDRP-2010-12, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
  21. Desai, Meghnad, 1991. "Human development : Concepts and measurement," European Economic Review, Elsevier, vol. 35(2-3), pages 350-357, April.
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