Measuring Human Development: A Stochastic Dominance Approach

Mehmet Pinar, Thanasis Stengos and Nikolas Topaloglou

Working Paper series from Rimini Centre for Economic Analysis

Abstract: We consider a weighting scheme that yields the best-case scenario measurement of the Human Development Index (HDI) using an approach that relies on consistent tests for stochastic dominance efficiency (SDE). We compare a given hybrid composite index such as the official equally-weighted HDI to all possible indices constructed from a set of individual components to obtain the most optimistic scenario for development. In the best-case scenario index education is weighted considerably more than the other two components, per capita income and life expectancy, relative to the weight that it gets in the official equally-weighted index. We find that the best-case scenario hybrid index leads to a marked improvement of measured development over time when compared with the official equally-weighted HDI.

Keywords: Nonparametric Stochastic Dominance; Human Development Index; Mixed Integer Programming (search for similar items in EconPapers)
JEL-codes: C12 C13 C15 O15 O57 (search for similar items in EconPapers)
Date: 2012-06
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Measuring human development: a stochastic dominance approach (2013)
Working Paper: Measuring human development: a stochastic dominance approach (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:42_12

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