Illustrative Applications of Unidimensional Development Indices

This chapter seeks to provide some indicative applications of the unidimensional development ranking method suggested in the previous chapter. For an application to the problem of studying time trends, it considers the Indian economy in the recent decades and studies (separately) the cases in which consumer expenditure (as proxy for income) and wealth are the relevant dimensions of developmentDimensions of development. As a cross-sectional application, it compares the levels of development of the BRICS countries in a recent year (2017), considering wealth to be the dimension of interest. So far as the data source for consumer expenditure is concerned, we follow the standard practice of using the findings of the quinquennial large-sample surveys conducted by the National Sample Survey Office. The All-India Debt and Investment Surveys constitute the data source for wealth distribution in India. For the cross-sectional exercise on the BRICs countries in 2017, the Global Wealth ReportGlobal wealth report for that year by Credit Suisse has been used. It is found that our suggested methodology is a non-trivial extension of the conventional crisp (i.e. non-fuzzy) theory in the sense that in a number of cases in which the conventional approach fails to rank two economies (or the same economy at two points of time) in terms of the level of development, it does yield definitive conclusions. Since we use real (rather than hypothetical) data, these findings seem to provide support to the suggested methodology.