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On Some Problems of Using the Human Development Index in Economic History

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  • Nicola Amendola
  • Giacomo Gabbuti
  • Giovanni Vecchi

Abstract

The Human Development Index (HDI) has attracted increasing interest among economic historians during the last 30 years. This paper provides a theoretical framework that shows that the HDI is equivalent to a paternalistic social welfare function: this implies that all alternative HDI formulas used by economic historians are a representation of their ethical systems. The problem is neither the choice of the dimensions included in the HDI, nor the choice of the weighting scheme, but the lack of consistency with standard economic theory. A key consequence is that with HDI, 'anything goes'. Using Italy 1861-2016 as a case study, we show how given the same data, and identical choices for the dimensions and weights defining the HDI, the interpretation of the Italians' living standard long-run evolution is entirely driven by the analyst's preferences. We conclude speculating on possible solutions to reconcile the use of HDI to assist historical analysis.

Suggested Citation

  • Nicola Amendola & Giacomo Gabbuti & Giovanni Vecchi, 2021. "On Some Problems of Using the Human Development Index in Economic History," LEM Papers Series 2021/42, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:2021/42
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    More about this item

    Keywords

    Human development index; economic wellbeing; composite indices; living standards; social welfare functions; Italy.;
    All these keywords.

    JEL classification:

    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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