Troubling Tradeoffs in the Human Development Index
The 20th Human Development Report has introduced a new version of its famous Human Development Index (HDI). The HDI aggregates country-level attainments in life expectancy, schooling and income per capita. Each year's rankings by the HDI are k...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101129085041 http://hdl.handle.net/10986/3967 |
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okr-10986-39672021-04-23T14:02:14Z Troubling Tradeoffs in the Human Development Index Ravallion, Martin ABSOLUTE VALUE AVERAGE INCOME AVERAGE INCOMES CONTINGENT VALUATION COUNTRY PERFORMANCE CROSS-COUNTRY DIFFERENCES DERIVATIVE DEVALUATION DEVALUATIONS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC THEORY ELASTICITY EMPIRICAL RESULTS ENROLMENT RATES EXPECTED UTILITY FUNCTIONAL FORM GDP GROWTH THEORY HOLDING HUMAN DEVELOPMENT HUMAN DEVELOPMENT INDEX INCOME INCOME EFFECT INCOME ELASTICITY INCREASING FUNCTION INEQUALITY INFLATION INNOVATION INTERNATIONAL BANK INTRINSIC VALUE INVESTING LABOR MARKET LIFE EXPECTANCY LIVING STANDARDS LOG INCOME LOW INCOMES MARGINAL COST MARGINAL COSTS MARGINAL UTILITY MARGINAL VALUE MARKET RETURNS MEAN INCOME NATIONAL INCOME POLICY MAKING POLICY RESEARCH POOR COUNTRIES POOR COUNTRY POOR PERSON POVERTY MEASURE POWER PARITY PRICE LEVELS PURCHASING POWER QUALITY OF LIFE RELATIVE PRICES RETURN RETURNS SCHOOLING TRADEOFFS TRANSPARENCY VALUATION VALUATIONS VALUE JUDGMENTS WAGES WEALTH The 20th Human Development Report has introduced a new version of its famous Human Development Index (HDI). The HDI aggregates country-level attainments in life expectancy, schooling and income per capita. Each year's rankings by the HDI are keenly watched in both rich and poor countries. The main change in the 2010 HDI is that it relaxes its past assumption of perfect substitutability between its three components. However, most users will probably not realize that the new HDI has also greatly reduced its implicit weight on longevity in poor countries, relative to rich ones. A poor country experiencing falling life expectancy due to (say) a collapse in its health-care system could still see its HDI improve with even a small rate of economic growth. By contrast, the new HDI's valuations of the gains from extra schooling seem unreasonably high -- many times greater than the economic returns to schooling. These troubling tradeoffs could have been largely avoided using a different aggregation function for the HDI, while still allowing imperfect substitution. While some difficult value judgments are faced in constructing and assessing the HDI, making its assumed tradeoffs more explicit would be a welcome step. 2012-03-19T18:43:02Z 2012-03-19T18:43:02Z 2010-11-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101129085041 http://hdl.handle.net/10986/3967 English Policy Research working paper ; no. WPS 5484 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ABSOLUTE VALUE AVERAGE INCOME AVERAGE INCOMES CONTINGENT VALUATION COUNTRY PERFORMANCE CROSS-COUNTRY DIFFERENCES DERIVATIVE DEVALUATION DEVALUATIONS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC THEORY ELASTICITY EMPIRICAL RESULTS ENROLMENT RATES EXPECTED UTILITY FUNCTIONAL FORM GDP GROWTH THEORY HOLDING HUMAN DEVELOPMENT HUMAN DEVELOPMENT INDEX INCOME INCOME EFFECT INCOME ELASTICITY INCREASING FUNCTION INEQUALITY INFLATION INNOVATION INTERNATIONAL BANK INTRINSIC VALUE INVESTING LABOR MARKET LIFE EXPECTANCY LIVING STANDARDS LOG INCOME LOW INCOMES MARGINAL COST MARGINAL COSTS MARGINAL UTILITY MARGINAL VALUE MARKET RETURNS MEAN INCOME NATIONAL INCOME POLICY MAKING POLICY RESEARCH POOR COUNTRIES POOR COUNTRY POOR PERSON POVERTY MEASURE POWER PARITY PRICE LEVELS PURCHASING POWER QUALITY OF LIFE RELATIVE PRICES RETURN RETURNS SCHOOLING TRADEOFFS TRANSPARENCY VALUATION VALUATIONS VALUE JUDGMENTS WAGES WEALTH |
| spellingShingle |
ABSOLUTE VALUE AVERAGE INCOME AVERAGE INCOMES CONTINGENT VALUATION COUNTRY PERFORMANCE CROSS-COUNTRY DIFFERENCES DERIVATIVE DEVALUATION DEVALUATIONS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC THEORY ELASTICITY EMPIRICAL RESULTS ENROLMENT RATES EXPECTED UTILITY FUNCTIONAL FORM GDP GROWTH THEORY HOLDING HUMAN DEVELOPMENT HUMAN DEVELOPMENT INDEX INCOME INCOME EFFECT INCOME ELASTICITY INCREASING FUNCTION INEQUALITY INFLATION INNOVATION INTERNATIONAL BANK INTRINSIC VALUE INVESTING LABOR MARKET LIFE EXPECTANCY LIVING STANDARDS LOG INCOME LOW INCOMES MARGINAL COST MARGINAL COSTS MARGINAL UTILITY MARGINAL VALUE MARKET RETURNS MEAN INCOME NATIONAL INCOME POLICY MAKING POLICY RESEARCH POOR COUNTRIES POOR COUNTRY POOR PERSON POVERTY MEASURE POWER PARITY PRICE LEVELS PURCHASING POWER QUALITY OF LIFE RELATIVE PRICES RETURN RETURNS SCHOOLING TRADEOFFS TRANSPARENCY VALUATION VALUATIONS VALUE JUDGMENTS WAGES WEALTH Ravallion, Martin Troubling Tradeoffs in the Human Development Index |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5484 |
| description |
The 20th Human Development Report has
introduced a new version of its famous Human Development
Index (HDI). The HDI aggregates country-level attainments in
life expectancy, schooling and income per capita. Each
year's rankings by the HDI are keenly watched in both
rich and poor countries. The main change in the 2010 HDI is
that it relaxes its past assumption of perfect
substitutability between its three components. However, most
users will probably not realize that the new HDI has also
greatly reduced its implicit weight on longevity in poor
countries, relative to rich ones. A poor country
experiencing falling life expectancy due to (say) a collapse
in its health-care system could still see its HDI improve
with even a small rate of economic growth. By contrast, the
new HDI's valuations of the gains from extra schooling
seem unreasonably high -- many times greater than the
economic returns to schooling. These troubling tradeoffs
could have been largely avoided using a different
aggregation function for the HDI, while still allowing
imperfect substitution. While some difficult value judgments
are faced in constructing and assessing the HDI, making its
assumed tradeoffs more explicit would be a welcome step. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Ravallion, Martin |
| author_facet |
Ravallion, Martin |
| author_sort |
Ravallion, Martin |
| title |
Troubling Tradeoffs in the Human Development Index |
| title_short |
Troubling Tradeoffs in the Human Development Index |
| title_full |
Troubling Tradeoffs in the Human Development Index |
| title_fullStr |
Troubling Tradeoffs in the Human Development Index |
| title_full_unstemmed |
Troubling Tradeoffs in the Human Development Index |
| title_sort |
troubling tradeoffs in the human development index |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101129085041 http://hdl.handle.net/10986/3967 |
| _version_ |
1764389259650793472 |