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Journal of Economic Growth

, Volume 18, Issue 1, pp 69–108 | Cite as

Measuring human development: a stochastic dominance approach

  • Mehmet Pinar
  • Thanasis StengosEmail author
  • Nikolas Topaloglou
Article

Abstract

We consider a weighting scheme that yields a best-case scenario for measured human development such as the official equally-weighted Human Development Index (HDI) using an approach that relies on consistent tests for stochastic dominance efficiency. We compare 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. It also turns out that the improvement in the official HDI is mainly driven by improvements over time in the education index, the component moving fastest relative to its targets, when compared with per capita income and life expectancy. 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 

JEL Classification

C12 C13 C15 O15 C57 

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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Mehmet Pinar
    • 1
  • Thanasis Stengos
    • 1
    Email author
  • Nikolas Topaloglou
    • 2
  1. 1.Department of EconomicsUniversity of GuelphGuelphCanada
  2. 2.Department of International European & Economic StudiesAthens University of Economics and BusinessAthensGreece

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