IDEAS home Printed from https://ideas.repec.org/a/eee/soceps/v70y2020ics0038012118300363.html
   My bibliography  Save this article

Constructing a generalized model of the human development index

Author

Listed:
  • Mangaraj, B.K.
  • Aparajita, Upali

Abstract

The human development index (HDI) has been a well-known yardstick of the United Nations Development Programme (UNDP) to measure human development (HD) from a multi-dimensional perspective, since its introduction in the first Human Development Report (HDR) in 1990. Although there have been several modifications in the computation of this index, we suggest a new perspective in a multi-criteria decision-making framework in this paper. The new methodology addresses some of the limitations of the existing approach without violating the guidelines of the UNDP. As a first step, we revisit the concept of the HDI and then integrate the average shortfall factor with the HDI for the construction of GHDI--a generalized model of the HDI. Then we propose GHDIR--a relative measure of the GHDI relative to a benchmark HD. This index is year-specific, and we determine it based on the goals of the human development indicators as fixed by the UNDP as well as the individual performance of all the countries under consideration for the year concerned. For this purpose, we employ a multi-criteria decision-making model using a two-step methodology. Initially, we develop a multi-objective model to create the benchmark HD. Next, we assess the GHDIR with a multi-index ranking model. We implement these procedures for the countries based on their empirical data on human development indicators as presented in the HDR (2014) and compare the HDI with the GHDI and GHDIR.

Suggested Citation

  • Mangaraj, B.K. & Aparajita, Upali, 2020. "Constructing a generalized model of the human development index," Socio-Economic Planning Sciences, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:soceps:v:70:y:2020:i:c:s0038012118300363
    DOI: 10.1016/j.seps.2019.100778
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0038012118300363
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.seps.2019.100778?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. P. Palazzi & A. Lauri, 1998. "The Human Development Index: suggested corrections," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 51(205), pages 193-221.
    2. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1133-1165.
    3. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    4. Emrouznejad, Ali & Yang, Guo-liang, 2018. "A survey and analysis of the first 40 years of scholarly literature in DEA: 1978–2016," Socio-Economic Planning Sciences, Elsevier, vol. 61(C), pages 4-8.
    5. Harald Trabold-Nübler, 1991. "The human development index—A new development indicator?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 26(5), pages 236-243, September.
    6. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    7. Sabina Alkire, James Foster, 2010. "Designing the Inequality-Adjusted Human Development Index (HDI)," OPHI Working Papers 37, Queen Elizabeth House, University of Oxford.
    8. Lynge Nielsen, 2013. "How to Classify Countries Based on Their Level of Development," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(3), pages 1087-1107, December.
    9. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    10. Larry Samuelson, 2004. "Information-Based Relative Consumption Effects," Econometrica, Econometric Society, vol. 72(1), pages 93-118, January.
    11. Botond Koszegi & Matthew Rabin, 2007. "Reference-Dependent Risk Attitudes," American Economic Review, American Economic Association, vol. 97(4), pages 1047-1073, September.
    12. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    13. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    14. James Foster & Luis Lopez-Calva & Miguel Szekely, 2005. "Measuring the Distribution of Human Development: methodology and an application to Mexico," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 6(1), pages 5-25.
    15. D K Despotis, 2005. "A reassessment of the human development index via data envelopment analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(8), pages 969-980, August.
    16. Botond Koszegi & Matthew Rabin, 2009. "Reference-Dependent Consumption Plans," American Economic Review, American Economic Association, vol. 99(3), pages 909-936, June.
    17. Luis Rayo & Gary S. Becker, 2007. "Evolutionary Efficiency and Happiness," Journal of Political Economy, University of Chicago Press, vol. 115(2), pages 302-337.
    18. Kanbur, R., 1990. "Poverty and Developement: The Human Development Report and The World Development Report, 1990," Papers 103, Warwick - Development Economics Research Centre.
    19. M P Estellita Lins & L Angulo-Meza & A C Moreira Da Silva, 2004. "A multi-objective approach to determine alternative targets in data envelopment analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(10), pages 1090-1101, October.
    20. Despotis, D.K., 2005. "Measuring human development via data envelopment analysis: the case of Asia and the Pacific," Omega, Elsevier, vol. 33(5), pages 385-390, October.
    21. Desai, Meghnad, 1991. "Human development : Concepts and measurement," European Economic Review, Elsevier, vol. 35(2-3), pages 350-357, April.
    22. Sagar, Ambuj D. & Najam, Adil, 1998. "The human development index: a critical review," Ecological Economics, Elsevier, vol. 25(3), pages 249-264, June.
    23. D K Despotis, 2002. "Improving the discriminating power of DEA: focus on globally efficient units," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(3), pages 314-323, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Torkayesh, Ali Ebadi & Pamucar, Dragan & Ecer, Fatih & Chatterjee, Prasenjit, 2021. "An integrated BWM-LBWA-CoCoSo framework for evaluation of healthcare sectors in Eastern Europe," Socio-Economic Planning Sciences, Elsevier, vol. 78(C).
    2. Öztürk, Elif Göksu & Guimarães, Paulo & Tavares Silva, Sandra, 2024. "Building a composite index using the multi-objective approach: An application to the case of human development," Socio-Economic Planning Sciences, Elsevier, vol. 91(C).
    3. Prasad, Sanjeev K. & Mangaraj, B.K., 2022. "A multi-objective competitive-design framework for fuel procurement planning in coal-fired power plants for sustainable operations," Energy Economics, Elsevier, vol. 108(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeni Klugman & Francisco Rodríguez & Hyung-Jin Choi, 2011. "The HDI 2010: new controversies, old critiques," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 249-288, June.
    2. Giménez, Víctor & Ayvar-Campos, Francisco Javier & Navarro-Chávez, José César Lenin, 2017. "Efficiency in the generation of social welfare in Mexico: A proposal in the presence of bad outputs," Omega, Elsevier, vol. 69(C), pages 43-52.
    3. Mariya Burdina & Scott Hiller, 2021. "When Falling Just Short is a Good Thing: The Effect of Past Performance on Improvement," Journal of Sports Economics, , vol. 22(7), pages 777-798, October.
    4. Francisco Gomes & Michael Haliassos & Tarun Ramadorai, 2021. "Household Finance," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 919-1000, September.
    5. Heiko Karle & Heiner Schumacher & Rune Vølund, 2020. "Consumer search and the uncertainty effect," Working Papers of Department of Economics, Leuven 657766, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    6. Markus Jäntti & Ravi Kanbur & Milla Nyyssölä & Jukka Pirttilä, 2014. "Poverty and Welfare Measurement on the Basis of Prospect Theory," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 182-205, March.
    7. Babcock, Bruce, 2015. "Using Prospect Theory to Explain Anomalous Crop Insurance Coverage Choice," 2015 Allied Social Sciences Association (ASSA) Annual Meeting, January 3-5, 2015, Boston, Massachusetts 189682, Agricultural and Applied Economics Association.
    8. Axel Ockenfels & Dirk Sliwka & Peter Werner, 2015. "Bonus Payments and Reference Point Violations," Management Science, INFORMS, vol. 61(7), pages 1496-1513, July.
    9. Paolo Guasoni & Gur Huberman & Dan Ren, 2020. "Shortfall aversion," Mathematical Finance, Wiley Blackwell, vol. 30(3), pages 869-920, July.
    10. repec:jdm:journl:v:17:y:2022:i:4:p:797-815 is not listed on IDEAS
    11. Ghossoub, Mario, 2011. "Towards a Purely Behavioral Definition of Loss Aversion," MPRA Paper 37628, University Library of Munich, Germany, revised 23 Mar 2012.
    12. Luc Meunier & Sima Ohadi, 2023. "When are two portfolios better than one? A prospect theory approach," Theory and Decision, Springer, vol. 94(3), pages 503-538, April.
    13. Josheski Dushko & Apostolov Mico, 2023. "The Prospect Theory and First Price Auctions: an Explanation of Overbidding," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 27(1), pages 33-74, March.
    14. Karle, Heiko & Schumacher, Heiner & Vølund, Rune, 2023. "Consumer loss aversion and scale-dependent psychological switching costs," Games and Economic Behavior, Elsevier, vol. 138(C), pages 214-237.
    15. Meisner, Vincent & von Wangenheim, Jonas, 2019. "School Choice and Loss Aversion," Rationality and Competition Discussion Paper Series 208, CRC TRR 190 Rationality and Competition.
    16. Olapeju Comfort Ogunmokun & Oluwasoye P. Mafimisebi & Demola Obembe, 2023. "Prospect theory and bank credit risk decision-making behaviour: a systematic literature review and future research agenda," SN Business & Economics, Springer, vol. 3(4), pages 1-25, April.
    17. Schneck, Stefan, 2014. "My Wage is Unfair! Just a Feeling or Comparison with Peers?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(3), pages 245-273.
    18. Panagiotis Ravanos & Giannis Karagiannis, 2021. "A VEA Benefit-of-the-Doubt Model for the HDI," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(1), pages 27-46, May.
    19. Yuval Arbel & Danny Ben-Shahar & Stuart Gabriel, 2016. "Are The Disabled Less Loss Averse? Evidence From A Natural Policy Experiment," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1291-1318, April.
    20. Carpentier, A. & Reboud, X., 2018. "Why farmers consider pesticides the ultimate in crop protection: economic and behavioral insights," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277528, International Association of Agricultural Economists.
    21. Suman Seth & Antonio Villar, 2014. "Human Development, Inequality and Poverty: empirical findings," Working Papers 14.11, Universidad Pablo de Olavide, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:soceps:v:70:y:2020:i:c:s0038012118300363. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/seps .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.