Social Indicators Research

, Volume 127, Issue 3, pp 959–981 | Cite as

Classifying Human Development with Latent Class Analysis

  • Ann L. OwenEmail author
  • Julio Videras


We use latent class analysis to create an indicator of human development that integrates a broad range of country characteristics including per capita income, health, inequality, environmental performance, and life satisfaction. We show that each of these characteristics is important in distinguishing across development experiences. Because latent class analysis is model-based and allows us to test the significance of each aspect of development and the number and size of the groupings, this approach is superior to an index that divide countries into ad hoc equally-sized groups. Our results suggest that income per capita does not, by itself, capture all of the important dimensions of development and that a rank-ordering of development experiences may not always be appropriate.


Long-run growth Standard of living Human development index Finite mixture model 

JEL Classifiacation

O4 I3 



We are grateful for helpful comments from Lewis Davis.


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Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  1. 1.Hamilton CollegeClintonUSA

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