Skip to main content
Top
Published in: Social Indicators Research 3/2018

20-07-2017 | Original Research

Trade-Offs in a Multidimensional Human Development Index

Author: Jaya Krishnakumar

Published in: Social Indicators Research | Issue 3/2018

Log in

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

This paper deals with the issue of trade-offs in an aggregate measure of well-being and argues for a simple multi-dimensional human development measure which allows no substitutability among the dimensions. From a theoretical point of view, our index is shown to satisfy desirable normative and statistical properties highlighted by the literature as well as the practical requirements of user-friendliness and simplicity. An alternative that is less stringent for policy is also analysed from the point of view of trade-offs, including a comparison of ‘social’ trade-offs with market trade-offs when the latter are available. We end the paper with two empirical illustrations, at macro and micro levels, comparing our index with other commonly used indices in each context.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

Appendix
Available only for authorised users
Footnotes
1
Note that trade-off is not the only aspect discussed in their papers but we only mention this point in the context of this paper.
 
2
As mentioned earlier, we are not elaborating on properties such as distributional sensitivity and associational sensitivity due to the fact that we are arguing for independence among the dimensions in our index, see Sect 4.2.
 
3
This is only at a given point in time for a given individual/country as the worst performing dimension will not always be the same over time. Hence all dimensions will ultimately enter the index value if we span a sufficient length of time.
 
4
Recall that it is positive when they are substitutes and negative when they are complements.
 
5
See for example King et al. (2004) who demonstrate the misleading conclusions that such comparisons may lead to if these measures are not made comparable by suitable anchoring techniques.
 
6
Iron deficiency resulting from low levels of haemoglobin is thought to be the most common nutritional deficiency in the world today, see Thomas (2013).
 
7
Decancq and Lugo (2013) cite some recent attempts in this direction, e.g. (Becker et al. 2005; Murphy and Topel 2006; Fleurbaey and Gaulier 2009).
 
Literature
go back to reference Anand, S., & Sen, A. K. (1997). Concepts of human development and poverty: A multidimensional perspective. In S. Fukuda-Parr & A. Shiva Kumar (Eds.), Readings in human development. Oxford: Oxford University Press. Anand, S., & Sen, A. K. (1997). Concepts of human development and poverty: A multidimensional perspective. In S. Fukuda-Parr & A. Shiva Kumar (Eds.), Readings in human development. Oxford: Oxford University Press.
go back to reference Atkinson, T. (2003). Multidimensional deprivation: Contrasting social welfare and counting approaches. Journal of Economic Inequality, 1, 51–65.CrossRef Atkinson, T. (2003). Multidimensional deprivation: Contrasting social welfare and counting approaches. Journal of Economic Inequality, 1, 51–65.CrossRef
go back to reference Atkinson, T., & Bourguignon, F. (1982). The comparison of multi-dimensioned distributions of economic status. The Review of Economic Studies, 49(2), 183–201.CrossRef Atkinson, T., & Bourguignon, F. (1982). The comparison of multi-dimensioned distributions of economic status. The Review of Economic Studies, 49(2), 183–201.CrossRef
go back to reference Becker, G. S., Philipson, T. J., & Soares, R. R. (2005). The quantity and quality of life and the evolution of world inequality. American Economic Review, 95(1), 277–291.CrossRef Becker, G. S., Philipson, T. J., & Soares, R. R. (2005). The quantity and quality of life and the evolution of world inequality. American Economic Review, 95(1), 277–291.CrossRef
go back to reference Bourguignon, F. (1999). Comment to ‘Multidimensional approaches to welfare analysis’ by E. Massoumi. In J. Silber (Ed.), Handbook of income inequality measurement (pp. 477–484). Dordrecht: Kluwer. Bourguignon, F. (1999). Comment to ‘Multidimensional approaches to welfare analysis’ by E. Massoumi. In J. Silber (Ed.), Handbook of income inequality measurement (pp. 477–484). Dordrecht: Kluwer.
go back to reference Bourguignon, F., & Chakravarty, S. (2003). The measurement of multidimensional poverty. Journal of Economic Inequality, 1, 25–49.CrossRef Bourguignon, F., & Chakravarty, S. (2003). The measurement of multidimensional poverty. Journal of Economic Inequality, 1, 25–49.CrossRef
go back to reference Brey, P. (2012). Well-being in philosophy, psychology, and economics. In P. Brey, A. Briggle, & E. Spence (Eds.), The good life in a technological age (pp. 15–34). London: Routledge. Brey, P. (2012). Well-being in philosophy, psychology, and economics. In P. Brey, A. Briggle, & E. Spence (Eds.), The good life in a technological age (pp. 15–34). London: Routledge.
go back to reference CDC, Center for Disease Control and Prevention. (2000). Measuring healthy days. Atlanta: CDC. CDC, Center for Disease Control and Prevention. (2000). Measuring healthy days. Atlanta: CDC.
go back to reference Chakravarty, C. (2003). A generalized human development index. Review of Development Economics, 7(1), 99–114.CrossRef Chakravarty, C. (2003). A generalized human development index. Review of Development Economics, 7(1), 99–114.CrossRef
go back to reference Chakravarty, S., & Silber, J. (2008). Measuring multidimensional poverty: The axiomatic approach. In N. Kakwani & J. Silber (Eds.), Quantitative approaches to multidimensional poverty measures. New York: Palgrave Macmillan. Chakravarty, S., & Silber, J. (2008). Measuring multidimensional poverty: The axiomatic approach. In N. Kakwani & J. Silber (Eds.), Quantitative approaches to multidimensional poverty measures. New York: Palgrave Macmillan.
go back to reference Cooke, P. J., Melchert, T. P., & Connor, K. (2016). Measuring well-being: A review of instruments. The Counseling Psychologist, 44(5), 730–757.CrossRef Cooke, P. J., Melchert, T. P., & Connor, K. (2016). Measuring well-being: A review of instruments. The Counseling Psychologist, 44(5), 730–757.CrossRef
go back to reference Decancq, K., Fleurbaey, M., & Schokkaert, E. (2015). Happiness, equivalent income and respect for individual preferences. Economica, 82, 1082–1106.CrossRef Decancq, K., Fleurbaey, M., & Schokkaert, E. (2015). Happiness, equivalent income and respect for individual preferences. Economica, 82, 1082–1106.CrossRef
go back to reference Decancq, K., & Lugo, M. A. (2013). Weights in multidimensional indices of wellbeing: An overview. Econometric Reviews, 32(1), 7–34.CrossRef Decancq, K., & Lugo, M. A. (2013). Weights in multidimensional indices of wellbeing: An overview. Econometric Reviews, 32(1), 7–34.CrossRef
go back to reference Decancq, K., & Schokkaert, E. (2016). Beyond GDP: Using equivalent incomes to measure well-being in Europe. Social Indicators Research, 126, 21–55.CrossRef Decancq, K., & Schokkaert, E. (2016). Beyond GDP: Using equivalent incomes to measure well-being in Europe. Social Indicators Research, 126, 21–55.CrossRef
go back to reference Diez, H., de la Vega, M. C. L. & Urrutia, A. M. (2008). The Bourguignon and Chakravarty multidimensional poverty family: A characterisation. Mimeo. Diez, H., de la Vega, M. C. L. & Urrutia, A. M. (2008). The Bourguignon and Chakravarty multidimensional poverty family: A characterisation. Mimeo.
go back to reference Duclos, J.-Y., Sahn, D., & Younger, S. (2006). Robust multidimensional poverty comparisons. The Economic Journal, 116(514), 943–968.CrossRef Duclos, J.-Y., Sahn, D., & Younger, S. (2006). Robust multidimensional poverty comparisons. The Economic Journal, 116(514), 943–968.CrossRef
go back to reference Fleurbaey, M., & Gaulier, G. (2009). International comparisons of living standards by equivalent incomes. Scandinavian Journal of Economics, 111(3), 597–624.CrossRef Fleurbaey, M., & Gaulier, G. (2009). International comparisons of living standards by equivalent incomes. Scandinavian Journal of Economics, 111(3), 597–624.CrossRef
go back to reference King, G., Murray, C. J. L., Salomon, J. A., & Tandon, A. (2004). Enhancing the validity and cross-cultural comparability of measurement in survey research. American Political Science Review, 98, 191–205.CrossRef King, G., Murray, C. J. L., Salomon, J. A., & Tandon, A. (2004). Enhancing the validity and cross-cultural comparability of measurement in survey research. American Political Science Review, 98, 191–205.CrossRef
go back to reference Klugman, J., Rodriguez, F., & Choi, H. J. (2011). The HDI 2010: New controversies, old critiques. The Journal of Economic Inequality, 9(2), 249–288.CrossRef Klugman, J., Rodriguez, F., & Choi, H. J. (2011). The HDI 2010: New controversies, old critiques. The Journal of Economic Inequality, 9(2), 249–288.CrossRef
go back to reference Kolm, S.-C. (1977). Multidimensional equalitarianisms. Quarterly Journal of Economics, 91(1), 1–3.CrossRef Kolm, S.-C. (1977). Multidimensional equalitarianisms. Quarterly Journal of Economics, 91(1), 1–3.CrossRef
go back to reference Krishnakumar, J. (2013), Quantitative methods for the capability approach. In UNESCO-EOLSS Joint Committee (Ed.), Encyclopedia of life support systems (EOLSS): Social and cultural development of human resources, developed under the auspices of the UNESCO. Oxford: Eolss Publishers http://www.eolss.net. Krishnakumar, J. (2013), Quantitative methods for the capability approach. In UNESCO-EOLSS Joint Committee (Ed.), Encyclopedia of life support systems (EOLSS): Social and cultural development of human resources, developed under the auspices of the UNESCO. Oxford: Eolss Publishers http://​www.​eolss.​net.
go back to reference Krishnakumar, J., & Nagar, A. L. (2008). On exact statistical properties of multidimensional indicators based on principal components. Factor Analysis, MIMIC and Structural Equation Models, Social Indicators Research, 87, 481–496. Krishnakumar, J., & Nagar, A. L. (2008). On exact statistical properties of multidimensional indicators based on principal components. Factor Analysis, MIMIC and Structural Equation Models, Social Indicators Research, 87, 481–496.
go back to reference Masssoumi, E. (1986). The measurement and decomposition of multidimensional inequality. Econometrica, 54, 991–997.CrossRef Masssoumi, E. (1986). The measurement and decomposition of multidimensional inequality. Econometrica, 54, 991–997.CrossRef
go back to reference Massoumi, E., & Nickelsburg, G. (1988). Multidimensional measures of well-being and an analysis of inequality in the Michigan data. Journal of Business and Economic Statistics, 6(3), 327–334. Massoumi, E., & Nickelsburg, G. (1988). Multidimensional measures of well-being and an analysis of inequality in the Michigan data. Journal of Business and Economic Statistics, 6(3), 327–334.
go back to reference Massoumi, J., & Lugo, M. A. (2008). The information basis of multivariate poverty assessments. In N. Kakwani & J. Silber (Eds.), Quantitative approaches to multidimensional poverty measures. New York: Palgrave Macmillan. Massoumi, J., & Lugo, M. A. (2008). The information basis of multivariate poverty assessments. In N. Kakwani & J. Silber (Eds.), Quantitative approaches to multidimensional poverty measures. New York: Palgrave Macmillan.
go back to reference Mauro, V., Biggeri, M., & Maggino, F. (2016). Measuring and monitoring poverty and well-being: A new approach for the synthesis of multidimensionality. Social Indicators Research,. doi:10.1007/s11205-016-1484-1. Mauro, V., Biggeri, M., & Maggino, F. (2016). Measuring and monitoring poverty and well-being: A new approach for the synthesis of multidimensionality. Social Indicators Research,. doi:10.​1007/​s11205-016-1484-1.
go back to reference Murphy, K. M., & Topel, R. H. (2006). The value of health and longevity. Journal of Political Economy, 114(5), 871–904.CrossRef Murphy, K. M., & Topel, R. H. (2006). The value of health and longevity. Journal of Political Economy, 114(5), 871–904.CrossRef
go back to reference Ravallion, M. (2012). Troubling tradeoffs in the human development index. Journal of Development Economics, 99(2), 201–209.CrossRef Ravallion, M. (2012). Troubling tradeoffs in the human development index. Journal of Development Economics, 99(2), 201–209.CrossRef
go back to reference Segura, L. S., & Moya, E. G. (2009). Human development index: A non-compensatory assessment. Cuadernos de Economia, 28(50), 223–235. Segura, L. S., & Moya, E. G. (2009). Human development index: A non-compensatory assessment. Cuadernos de Economia, 28(50), 223–235.
go back to reference Sen, A. K. (1993). Capability and well-being. In M. Nussbaum & A. Sen (Eds.), The quality of life. Oxford: Clarendon Press. Sen, A. K. (1993). Capability and well-being. In M. Nussbaum & A. Sen (Eds.), The quality of life. Oxford: Clarendon Press.
go back to reference Sen, A. K. (1999). Development as freedom. Oxford: Oxford University Press. Sen, A. K. (1999). Development as freedom. Oxford: Oxford University Press.
go back to reference Seth, S. (2009). Inequality, interactions, and human development. Journal of Human Development and Capabilities, 10(3), 375–396.CrossRef Seth, S. (2009). Inequality, interactions, and human development. Journal of Human Development and Capabilities, 10(3), 375–396.CrossRef
go back to reference Seth, S. (2013). A class of distribution and association sensitive multidimensional welfare indices. Journal of Economic Inequality, 11(2), 133–162.CrossRef Seth, S. (2013). A class of distribution and association sensitive multidimensional welfare indices. Journal of Economic Inequality, 11(2), 133–162.CrossRef
go back to reference Thomas, D., et al. (2013). Iron deficiency and the well-being of older adults: Early results from a randomized nutrition intervention. UCLA: Mimeo. Thomas, D., et al. (2013). Iron deficiency and the well-being of older adults: Early results from a randomized nutrition intervention. UCLA: Mimeo.
go back to reference Thorbecke, E. (2008). Multidimensional poverty: Conceptual and measurement issues. In N. Kakwani & J. Silber (Eds.), The many dimensions of poverty. New York: Palgrave MacMillan. Thorbecke, E. (2008). Multidimensional poverty: Conceptual and measurement issues. In N. Kakwani & J. Silber (Eds.), The many dimensions of poverty. New York: Palgrave MacMillan.
go back to reference Tsui, K. (2002). Multidimensional poverty indices. Social Choice and Welfare, 19(1), 69–93.CrossRef Tsui, K. (2002). Multidimensional poverty indices. Social Choice and Welfare, 19(1), 69–93.CrossRef
go back to reference WHO (1997). WHOQOL, measuring quality of life, division of mental health and prevention of substance abuse. World Health Organisation. WHO (1997). WHOQOL, measuring quality of life, division of mental health and prevention of substance abuse. World Health Organisation.
Metadata
Title
Trade-Offs in a Multidimensional Human Development Index
Author
Jaya Krishnakumar
Publication date
20-07-2017
Publisher
Springer Netherlands
Published in
Social Indicators Research / Issue 3/2018
Print ISSN: 0303-8300
Electronic ISSN: 1573-0921
DOI
https://doi.org/10.1007/s11205-017-1679-0

Other articles of this Issue 3/2018

Social Indicators Research 3/2018 Go to the issue