The tyranny of international index rankings

International index rankings are popular, but perhaps too persuasive. They emphasize country differences where similarity is the dominant feature. Rankings based on Doing Business, the Human Development Index and Freedom House can be misleading, not because of wrong indicators, but because the estimation of the scores ignores inherent uncertainty. Re-estimated with a method that captures this uncertainty, it becomes clear that ranking every adjacent country is a rather courageous activity.     

The ‘Troubling Tradeoffs’ Paradox and a Resolution

Ravallion ( 2012a ) argues that the Human Development Index (HDI) embeds questionable tradeoffs between the dimensions used to compute the index. To alleviate these problems he proposes the adoption of one of the indices developed by Chakravarty ( 2003 ). In this paper I identify the following paradox: while the Chakravarty indices clearly exhibit more sensible tradeoffs than the HDI, the HDI produces more sensible rankings than the Chakravarty indices. To solve the paradox I identify the axioms behind each methodology responsible for the unintuitive tradeoffs and rankings and illustrate how to develop an index with these questionable axioms removed. This approach can result in methodologies that exhibit more intuitive tradeoffs by design, as it seeks inputs from the public as to what those tradeoffs ought to be, and produces rankings that are more in line with what the HDI wishes to measure: human development and capabilities, as conceptualized by Sen ( 1985 ).     

Gender and regional inequality in human development: the case of Spain1

In this paper, we present estimates of the Human Development Index and the Gender-Related Development Index in the Autonomous Communities of Spain. Our case study of Spain, a developed country with clear gender and regional differences, demonstrates the importance of adjusting human development indices in accordance with gender discrimination and regional inequalities. We also show the significance of the income component in assessing the development level of women in countries like Spain, where lack of employment or low remuneration are the chief characteristics of women's inequality. Our analysis makes clear that the Gender-Related Human Development Index has limited applicability in developed countries; it also illustrates the need for alternative variables or models to assess inequality in those countries.     

Social indicators and comparisons of living standards

Construction of an international index of standards of living, incorporating social indicators and economic output, typically involves scaling and weighting procedures that lack welfare-economic foundations. Revealed preference axioms can be used to make quality-of-life comparisons if we can estimate the representative household's production technology for the social indicators. This method is applied to comparisons of gross domestic product (GDP) and life expectancy for 58 countries. Neither GDP rankings, nor the rankings of the Human Development Index (HDI), are consistent with the partial ordering of revealed preference. A method of constructing a utility-consistent index incorporating both consumption and life expectancy is suggested.     

Maximizing human development

The Human Development Index (HDI) is widely used as a measure of well‐being. We examine the allocations implied by the maximization of this index using a standard growth model. Maximization leads to consumption (excluding education and health expenditures) being pushed to minimal levels. It also leads to the overaccumulation of education and/or health capital and possibly physical capital, relative to the standard golden rule. We propose an alternative specification for the HDI, where consumption replaces income as a proxy for decent standard of living. Maximization of this alternative implies a ‘human development golden rule’ which balances consumption, education and health expenditure. We advocate the method of optimization subject to constraints for revealing the policy implications of taking an achievement measure and its underlying philosophy seriously.     

Troubling tradeoffs in the Human Development Index

The 20th Human Development Report introduced a new version of its famous Human Development Index (HDI), which aggregates country-level attainments in life expectancy, schooling and income. The main change was to relax the past assumption of perfect substitutability between its components. Most users will not, however, realize that the new HDI has also greatly reduced its implicit weight on longevity in poor countries, relative to rich ones. By contrast, the new HDI's valuations of extra schooling are now very high—many times the economic returns. An alternative index is proposed that embodies less troubling tradeoffs while still allowing imperfect substitution.     

HOW SHOULD WE MEASURE THE “ECONOMIC” ASPECTS OF WELL‐BEING?

The Human Development Index (HDI) uses GDP per capita to measure “command over resources,” which implicitly makes the strong value judgment that inequality and insecurity do not matter. This paper presents revised estimates of the Index of Economic Well‐Being (IEWB) for the United States, the U.K., Canada, Australia, Germany, Norway and Sweden for the period 1980 to 2001 and demonstrates that replacing an index of the log per capita incomes with our IEWB as the “command over resources” component in the Human Development Index (HDI) affects the level and trend of the HDI, even among affluent nations. Because the IEWB recognizes four dimensions of command over resources (Current effective per capita Consumption flows, Net societal Accumulation of stocks of productive resources, Income Distribution and Economic Security), its use has a particularly large impact where underlying trends in these components diverge (e.g. the U.K. or the United States).     

Happiness and the Human Development Index: Australia Is Not a Paradox

In ‘Happiness and the Human Development Index: The Paradox of Australia’, Blanchflower and Oswald (2005) observe an apparent puzzle: they claim that Australia ranks highly in the Human Development Index (HDI), but relatively poorly in happiness. However, when we compare their happiness data with the HDI, Australia appears happier, not sadder, than its HDI score would predict. This conclusion also holds when we turn to a larger cross‐national dataset than the one used by Blanchflower and Oswald, when we analyse life satisfaction in place of happiness, and when we measure development using Gross Domestic Product per capita in place of the HDI. Indeed, in the World Values Survey, only one other country (Iceland) has a significantly higher level of both life satisfaction and happiness than Australia. Our findings accord with numerous cross‐national surveys conducted since the 1940s, which have consistently found that Australians report high levels of well‐being.     

Adjusted net saving and welfare change

The World Bank has estimated Adjusted net (or genuine) saving (ANS) as a macro level index of sustainable development. ANS extends the conventional net saving by adding human capital accumulation and deducting natural resources losses. This paper tests ANSas an index of sustainable development. It examines whether ANS explains changes in welfare. Welfare is measured by Infant mortality rate (IMR) and Human Development Index (HDI). The study was conducted in 36 selected developing and developed countries and covers the period 1971-2000. The results suggest a positive and significant relationship between Adjusted net saving and aggregate welfare but weak in magnitude.     

An Axiomatic Foundation of the Multiplicative Human Development Index

The aggregation formula in the Human Development Index (HDI) was changed to a geometric mean in 2010. In this paper, we search for a theoretical justification for employing this new HDI formula. First, we find a maximal class of index functions, what we call quasi‐geometric means, that satisfy symmetry for the characteristics, normalization, and separability. Second, we show that power means are the only quasi‐geometric means satisfying homogeneity. Finally, the new HDI is the only power mean satisfying minimal lower boundedness, which is a local complementability axiom proposed by Herrero et al. (2010).     

Assessing editorial preferences towards Industrial Organization articles

In light of widespread specialization of research and teaching, it seems appropriate to supplement the existing general rankings of economics journals with subdiscipline-specific rankings. That is the primary objective of this paper. The availability of subdiscipline-specific rankings also permits both (i) alternative journal ranking methods for the general discipline that account for the breadth of a journal's impact across specialized fields, and (ii) estimation of the relative weights implicitly associated with each field in traditional disciplinary journal rankings. The results are robust to the exclusion of self-citations.     

Measuring Socio-Economic GENDER Inequality: Toward an Alternative to the UNDP Gender-Related Development Index

This paper assesses the United Nations Development Program’s (UNDP) Gender-Related Development Index (GDI). Although the GDI has increased attention on gender equality in human development, it suffers from several limitations. A major problem is that it conflates relative gender equality with absolute levels of human development and thus gives no information on comparative gender inequality among countries. Using the same indicators as the GDI, the paper constructs a Relative Status of Women (RSW) index, which demonstrates how using a measure of gender equality that abstracts from levels of development results in very different country rankings. However, the RSW is not an ideal measure of gender inequality. The GDI indicators are not the most appropriate ones for measuring gender inequality and hence both the RSW and the GDI have limited validity. The paper concludes by offering a conceptual framework that provides the basis for an alternative measure of gender inequality.     

我国金融排斥程度研究——基于金融排斥指数的构建与测算

金融排斥问题是当前世界大多数国家面临的共同难题,要解决金融排斥问题首先必须对金融排斥的程度进行科学测算。文章借鉴联合国开发计划署编制的人类发展指数,构建了金融排斥指数的测度模型,确定了衡量金融排斥程度的金融服务的深度、金融服务的可得度、金融服务的使用度、金融服务的可负担度等四个维度和相应的评价指标体系,并基于省际数据和确定的金融排斥指数测度模型,对我国各省份的金融排斥程度进行了具体测度和分析。研究发现,我国各省区金融排斥程度普遍较重而且存在巨大差异。     

国内外现代化指标体系和标准概述

本文首先介绍了国外现代化指标体系和标准,其中定性标准有：箱根模型、列维模型、现代人模型和比较模型等;定量标准有：布莱克标准、英格尔斯标准、世界银行的人均收入划分标准、联合国开发计划署的人类发展指数以及《联合国千年发展目标》中的指标体系等;接着介绍了国内有代表性的现代化指标体系和标准,如;中国《社会指标》课题组的社会指标体系、《中国现代化报告2001》评价指标体系;《中国可持续发展战略报告200177评价指标体系,最后简要分析了国内外现代化指标体系和标准对未来我国构建统一的现代化评价指标和标准的启示。     

A Multidimensional Poverty Index for Latin America

This paper proposes a new Multidimensional Poverty Index for Latin America. The index combines monetary and non‐monetary indicators, updates deprivation cut‐offs for certain traditional unsatisfied basic needs indicators and includes some new indicators, aiming to maximize regional comparability within the data constraints. The index is estimated for 17 countries of the region at two points in time—one around 2005 and the other around 2012. Overall, we estimate about 28 percent of people are multidimensionally poor in 2012 in the region. We find statistically significant reductions of poverty in most countries, both in terms of incidence and intensity over the period under analysis. However, important disparities between rural and urban areas remain. Statistical scrutiny of the index suggests that it captures the state of poverty relatively well while maintaining a certain parsimony and being highly robust to changes in weights, indicators, and poverty cut‐off.     

陇东黄土高原PREE系统可持续发展动态分析——以甘肃省庆阳市为例

人口、资源、环境和经济之间的相互作用构成了动态开放的PREE系统,本文以庆阳市为例,建立了可持续发展指标体系,通过用改进的熵值法赋予权重,计算各子系统的综合发展指数,对1978-2005年陇东黄土高原人口、经济、资源、环境系统及总体的可持续发展状况进行动态研究的基础上,探讨了各子系统之间的协调发展程度,揭示了庆阳市可持续发展中的问题,并提出了相关建议.     

Socioeconomic status or noise? Tradeoffs in the generation of school quality information

This paper calculates a time series of simple, standard measures of schools' relative performance. These are drawn from a 1997–2004 panel of Chilean schools, using individual-level information on test scores and student characteristics for each year. The results suggest there is a stark tradeoff in the extent to which rankings generated using these measures: i) can be shown to be very similar to rankings based purely on students' socioeconomic status, and ii) are very volatile from year to year. At least in Chile, therefore, producing a meaningful ranking of schools that may inform parents and policymakers may be harder than is commonly assumed.     

Eliciting,Applying And Exploring Multidimensional Welfare Weights: Evidence From The Field

By combining primary data on dimension importance collected in the field from three different samples and nationally representative survey data from the Dominican Republic, we offer a twofold contribution. The first one comes from an unincentivized questionnaire experiment, where the significance of the treatment effect shows that life domains are valued differently in a poverty vs a well‐being framework. This poses important questions on the anatomy of dimension importance and on the use of weights in empirical analyses, and opens the door to what we call a “concordance paradox” related to the very essence of the constructs of poverty and well‐being. As a second contribution, we employ the sets of weights collected in the field to assess the trend of multidimensional poverty and well‐being in the country. We find that the picking one set of weights or another is not a trivial choice, as they lead to opposite assessment results.     

Growth,reform indicators and policy complementarities1

In order to assess the growth implications of policy complementarities, this paper applies second‐best results to reform indicators. During the transition from central planning to EU integration, which corresponds to a policy cycle, a complementarity index based on structural indicators compiled by the European Bank for Reconstruction and Development (EBRD) decreases and then increases while the level of reforms tends to rise throughout. Corrected for initial conditions, the extent of macroeconomic stabilization and endogeneity, the level of reforms and changes in their complementarity are found to be positively related to output growth. The study uses panel data for 27 countries between 1989 and 2004.     

Measuring Efficiency: A Comparison of Multilevel Modelling and Data Envelopment Analysis in the Context of Higher Education

Data envelopment analysis (DEA) and multilevel modelling (MLM) are applied to a data set of 54,564 graduates from UK universities in 1993 to assess whether the choice of technique affects the measurement of universities’ performance. A methodology developed by Thanassoulis and Portela (2002; Education Economics, 10(2), pp. 183–207) allows each individual's DEA efficiency score to be decomposed into two components: one attributable to the university at which the student studied and the other attributable to the individual student. From the former component, a measure of each institution's teaching efficiency is derived and compared to the university effects from various multilevel models. The comparisons are made within four broad subjects: pure science, applied science, social science and arts. The results show that the rankings of universities derived from the DEA efficiencies which measure the universities’ own performance (i.e., having excluded the efforts of the individuals) are not strongly correlated with the university rankings derived from the university effects of the multilevel models. The data were also used to perform a university‐level DEA. The university efficiency scores derived from these DEAs are largely unrelated to the scores from the individual‐level DEAs, confirming a result from a smaller data set (Johnes, 2006a; European Journal of Operational Research, forthcoming). However, the university‐level DEAs provide efficiency scores which are generally strongly related to the university effects of the multilevel models.