Achievement and improvement in living standards—An empirical analysis

Abstract

Kakwani (1993) proposed some postulates for an index of improvement in the level of living of a population and suggested a class of achievement (level) indices, which in turn generates a class of improvement (change) indices. Using data on 80 developing countries he compared the achievements and improvements in the standard of living across these countries. He also examined the statistical relationship between the achievement index and the per capita Gross Domestic Product (GDP) using a loglinear formulation. In this paper we explore a more general model, a limiting case of which is the Kakwani model, using the same data set. It turns out that the general model explains the achievement index better than the Kakwani model.