On the use of composite indices in economic history. Lessons from Italy, 1861-2017

Nicola Amendola, Giacomo Gabbuti and Giovanni Vecchi

No 11, HHB Working Papers Series from The Historical Household Budgets Project

Abstract:

We argue against the use of composite indices, such as the Human Development Index, in economic history. We show that composite indices can be interpreted as paternalistic social welfare functions (PSWF), and therefore are nothing more than a formal representation of the analyst’s ethical system. This contrasts with the use economic historians typically make of composite indices, as tools to lend objectivity to the measurement of multidimensional phenomena. We support our claim by introducing a new constant-elasticity-of-substitution SWF family, which a) encompasses all composite indices put forth by the literature, and b) identifies the analyst’s implicit preferences by means of standard tools, e.g. marginal rates of substitution and elasticity of substitution parameters. The theoretical framework is illustrated by an empirical investigation of the long-run evolution of Italians’ living standards (1861-2017). We show how any history based on composite indices is one where both data and history play a minor role, if any.

Keywords: CES; composite indices; hdi; human development index; Italy; living standards; paternalistic social welfare function (search for similar items in EconPapers)
JEL-codes: N01 N30 O15 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2018-07-26
New Economics Papers: this item is included in nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://papers.hhbproject.com/media/workingpapers/1 ... i_vecchi_omoQ4rV.pdf 11_amendola_gabbuti_vecchi_omoQ4rV.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to papers.hhbproject.com:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hbu:wpaper:11

Access Statistics for this paper

More papers in HHB Working Papers Series from The Historical Household Budgets Project
Bibliographic data for series maintained by Giuliana Freschi (info@hhbproject.com this e-mail address is bad, please contact repec@repec.org).