Nayak, Purusottam and Mishra, SK (2012): Efficiency of Pena’s P2 Distance in Construction of Human Development Indices.
Download (339kB) | Preview
The paper is an attempt to evaluate the efficiency of Pena’s DP-2 method over a host of methods used to make composite indices. To undertake this exercise, variables and data used and methodology adopted in Human Development Report 2011 are employed along with nine other methodologies employed by other scholars. Although there is no agreed principle of judging an index to be best among alternative indices, it may be suggested that the composite index which is most informative among all other indices may be considered as the most acceptable one. The present study reveals that Pena-DP2 index and Penmax index have close similarity. Computationally, Pena’s method of construction of index is much simpler, but the interpretation of Penmax index is more straightforward. On the other hand, Maxmin index is norm-based and has a justification on Wald’s principle of decision-making. The Maxmin index also is the most egalitarian index against the Principal Component based index, which is known to be most elitist. On ‘sum of absolute correlation’ and ‘sum of squared correlation’, too, the Maxmin index is superior to other indices. It appears, therefore, that the Maxmin composite index which is obtained by maximization of minimum of correlation between the composite index and the constituent variables is a better than others. Further, if we go by the argument of Neumann and Morgenstern none of the composite indices is a cardinal measure in the strict sense of measurement.
|Item Type:||MPRA Paper|
|Original Title:||Efficiency of Pena’s P2 Distance in Construction of Human Development Indices|
|Keywords:||Human development index; Pena DP2 method; efficiency of composite index|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development|
|Depositing User:||Prof. Purusottam Nayak|
|Date Deposited:||25. May 2012 13:44|
|Last Modified:||25. Mar 2015 08:02|
Adelman, I. and Morris, C. T. (1967) Society & Politics and Economic Development. Baltimore: Johns Hopkins University Press.
Assi, J., Lucchini, M. and Spagnolo, A. (2012) Mapping Patterns of Well-being and Quality of Life in Extended Europe, International Review of Economics, DOI 10.1007/s12232-012-0147-z. http://www.springerlink.com/content/m842mlt515418706/fulltext.pdf
Atkinson, A.B., Cantillon, B., Marlier, E. and and B. Nolan (2005) Taking Forward the EU Social Inclusion Process. Luxembourg Presidency of the Council of European Union.
Bandura (2008) A Survey of Composite Indices Measuring Country Performance: 2008 Update, A UNDP/ODS Working Paper, New York. http://composite-indicators.jrc.ec.europa.eu/ Document/February%202008_update.pdf
Beck, C. (2008) Generalized Information and Entropy Measures in Physics, Contemporary Physics, Vol. 50, No. 4, pp. 495–510.
Cahill, M.B. and Sanchez, N. (1998) Using Principal Components to Produce an Economic and Social Development Index: An Application to Latin America and the U.S. Paper presented in the Sixth International Atlantic Economic Conference, Boston, MA, October 8-11.
Chakravarty, S.R (2003) A Generalized Human Development Index, Review of Development Economics, Vol.7, No.1, pp. 99-104.
Chatterjee, S.K. (2005) Measurement of Human Development: An Alternative Approach. Journal of Human Development and Capabilities, Vol.6, No.1, pp. 31-53.
Cuenca, E., Rodríguez, J.A. and Navarro, M. (2010) The Features of Development in the Pacific Countries of the African, Caribbean and Pacific Group. Social Indicators Research, Vol.99, No.3, pp. 469-485.
Cummins, R.A., Eckersley, R. Pallant, J., Van Vugt J. and Misajon, R. (2003) Developing A National Index of Subjective Wellbeing: The Australian Unity Wellbeing Index, Social Indicators Research, Vol.64, pp. 159-190.
Department of Economic Statistics (2004) Background Facts on Economic Statistics 2004:15 Comparing Welfare of Nations, Sweden: Stockholm. http://www.scb.se/Statistik/OV/OV9999/2004A01/OV9999_2004A01_BR_X100ST0415.pdf
Dominguez, S.M., Blancas, P.F.J., Gerrero, C.F.M. and Gonzalez, L.M. (2011) A Critical Review to Construct Composite Indicators, Revista De Metodos Cuantitativos Para La Economia Y La Empresa, Vol.11, pp. 41-70.
Dong, F. and Jensen, H.H. (2011) Measuring Food Safety Control in U.S. Hog Farms Using a Composite Indicator, Paper prepared for presentation at the Agricultural & Applied Economics Association’s AAEA & NAREA Joint Annual Meeting, Pittsburgh, Pennsylvania, July 24-26.
Economists Intelligence Unit (2004) The Economist Intelligence Unit’s Quality-of-life Index, The World in 2005. http://www.economist.com/media/pdf/QUALITY_OF_LIFE.pdf
Espina, P.Z. and Somarriba, N.A. (2012) An Assessment of Social Welfare in Spain: Territorial Analysis Using a Synthetic Welfare Indicator, Social Indicators Research. DOI 10.1007/s11205-012-0005-0 http://www.springerlink.com/content/m63m97v200810t74/fulltext.pdf
Esteban, M.D. and Morales, D. (1995) A Summary of Entropy Statistics, Kybernetika, Vol. 31, No. 4, pp. 337-346. Available at http://www.cse.msu.edu/~cse902/S03/entropy_measures.pdf (visited: 29.03.2012).
Cuenca, E. and Rodríguez, J.A. (2010) Measurement of Disparities between Indicators Associated with the Welfare in Least Developed Countries (LDCs) of Asia. Revista de Economia Mundial, Vol.25, pp. 83-108. http://redalyc.uaemex.mx/redalyc/pdf/866/86617254004.pdf
González, E., Cárcaba, A. and Ventura, J. (2011a) The Importance of the Geographic Level of Analysis in the Assessment of the Quality of Life: The Case of Spain, Social Indicators Research, Vol.102, pp. 209-228.
González, E., Cárcaba, A. and Ventura, J. (2011b) Quality of Life Ranking of Spanish Municipalities, Revista de Economía Aplicada, Vol.19, No.56, pp. 123-148.
González, E., Carcaba, A., Ventura, J., and Garcia, J. (2011a) Measuring Quality of Life in Spanish Municipalities, Local Government Studies, Vol.37, No.2, pp. 171-197.
González, E., Carcaba, A., Ventura, J., and Garcia, J. (2011b) Value Efficiency Assessment of Quality of Life in Spanish Municipalities, http://personales.ya.com/aeca/pub/on_line/ comunicaciones_xvcongresoaeca/cd/25f.pdf
Hashimoto, A., Sugita, T. and Haneda, S. (2009) Evaluating Shifts in Japan’s Quality-of-life, Socio-Economic Planning Sciences, Vol.43, No.4, pp. 263–273.
Henning, C. and Zarnekow, N. (2012) Putnam's Social Capital and Government Performance: Empirical Evidence from Rural Communities in Poland, Paper submitted to Public Choice Meeting, Florida, USA. http://www.springerlink.com/content/k4143tk635pjn1w5/fulltext.pdf
Herrero, C., Martinez, R. and Villar, A. (2007) A Multiplicative Human Development Index http://www.econ.unavarra.es/~espinosa/Site/Documentos/Herrero/MHDI_(HMV)_-_Apr07%5 B 1%5D.pdf
Hicks, N. and Streeten, P. (1979) Indicators of Development: The Search for a Basic Needs Yardstick, World Development, Vol.7, No.6, pp. 567-580.
Juana, D.D. and Jose, J.N.V. (2007) A Proposal of a Synthetic Indicator to Measure Poverty Intensity with an Application to EU-15 Countries. Working Paper Series 81. Society for the Study of Economic Inequality, ECINE, University of Alcala, Madrid: Spain.
Kuronen, M. (ed.) (2010) Research on Families and Family Policies in Europe State of the Art, Family Research Centre, University of Jyväskylä.
Mishra, S.K. (2012-a) A Note on the Indeterminacy and Arbitrariness of Pena’s Method of Construction of Synthetic Indicators, SSRN: http://ssrn.com/abstract=2026293
Mishra, S.K. (2012-b) A Note on Construction of Heuristically Optimal Pena’s Synthetic Indicators by the Particle Swarm Method of Global Optimization. SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2028395
Mishra S.K. (2012-c) A Maximum Entropy Perspective of Pena’s Synthetic Indicators. http://mpra.ub.uni-muenchen.de/37797
Mishra, S.K. (2012-d) A Comparative Study of Trends in Globalization Using Different Synthetic Indicators. SSRN: [doi: 10.2139/ssrn.2038127].
Mishra, S.K. (2011) A Comparative Study of Various Inclusive Indices and the Index Constructed by the Principal Component Analysis", IUP Journal of Computational Mathematics, Vol. 4, No. 2, pp. 7-26.
Mishra, S.K. (2009) On Construction of Robust Composite Indices by Linear Aggregation, ICFAI University Journal of Computational Mathematics, Vol.2, No.3, pp. 24-44.
Montero, J.M., Chasco, C. & Larraz, B. (2010) Building An Environmental Quality Index for A Big City: A Spatial Interpolation Approach Combined with A Distance Indicator, Journal of Geographical Systems, Vol.12, No.4, pp.435-459.
Morris, D. Morris (1979) Measuring the Condition of the World’s Poor: The Physical Quality of Life Index, Elmsford, NY: Pergamon Press (for the Overseas Development Council).
Nathan, H.S.K, Mishra, S. and Reddy, B.S. (2008) An Alternative Approach to Measure HDI. http://www.igidr.ac.in/pdf/publication/WP-2008-001.pdf
Neumann, J. von and Morgenstern, O. (1953) Theory of Games and Economic Behavior. London: OUP.
Noorbakhsh, F. (1998) A Modified Human Development Index, World Development, Vol.26, No.3, pp. 517-528.
Okulicz-Kozaryn, A. (2012) Income and Well-being across European Provinces, Social Indicators Research, Vol.106, No.2, pp. 371-392.
Organization for Economic Cooperation and Development (OECD) (1976) Measuring Social Well-Being: A Progress Report on the Development of Social Indicators. Paris: France.
Parsopoulos, K.E. and Vrahatis, M.N. (2006) Studying the Performance of Unified Particle Swarm Optimization on the Single Machine Total Weighted Tardiness Problem. In: Sattar, A., Kang , B.H. (eds) AI 2006, LNAI 4304, Springer-Verlag: pp. 1027–1031.
Pena, J.B. (1977) Problemas de la medición del bienestar y conceptos afines (Una aplicación al caso español). (Madrid: Instituto Nacional de Estadística (INE)).
Poveda, A.C. (2012) Estimating Effectiveness of the Control of Violence and Socioeconomic Development in Colombia: An Application of Dynamic Data Envelopment Analysis and Data Panel Approach, Social Indicators Research, Vol.105, No.3, pp. 343–366.
Prescott-Allen, Robert (2001) The Wellbeing of Nations: A Country-by-Country Index of Quality of Life and the Environment. Washington: Island Press.
Rodríguez, J.A. (2012) An Index of Child Health in the Least Developed Countries (LDCs) of Africa, Social Indicators Research, Vol.105, No.1, pp. 309-322.
Rodríguez, J.A. (2008) The Features of Development in Central America and the Caribbean. http://www.usc.es/congresos/xix-eep/descargas/papers/3E2.pdf
Rodríguez, J.A. and Salinas, J A. (2011). An Index of Maternal and Child Health in the Least Developed Countries of Asia, Gaceta Sanitaria. [in press]; doi:10.1016/j.gaceta.2011.05.021.
Rodríguez, J.A., Salinas, J.A. and Ubiña, A.J. (2012). An Index of Progress towards the MDG 6 in Sub-Saharan Africa: Combat HIV, AIDS and Malaria, Child Indicators Research, Vol.5, No.1, pp. 199-213.
Royuela, V., Suriñach, J. and Reyes, M. (2003) Measuring Quality of Life in Small Areas over Different Periods of Time, Social Indicators Research, Vol.64, No.1, pp. 51–74.
Somarriba, N. and Pena, B. (2009) Synthetic Indicators of Quality of Life in Europe, Social Indicators Research, Vol.94, No.1, pp. 115–133.
Social Watch (2005) Annual Report 2005: Roars and Whispers Gender and Poverty: Promises vs. Action. Montevideo, pp. 143-145.
Stanton, E.A. (2007) The Human Development Index: A History. Working Paper Series No.127, Political Economy Research Institute. Amherst: University of Massachusetts.
Streeten, P., Burki, J. S., Haq, M.U., Hicks, N. and Stewart, F. (1981) First Things First: Meeting Basic Human Needs in Developing Countries, New York: OUP.
Tasgetiren, F., Sevkli, M., Lian, Y.C., and Gencyilmaz, G. (2004) Particle Swarm Optimization Algorithm for Single Machine Weighted Tardiness Problem, Proceedings of IEEE Congress on Evolutionary Computation. pp. 1412–1419.
Tenorio, J.G.R. and Ramos, F. de S. (2011) Uma Análise Multidimensional Da Qualidade De Vida Nos Estados Brasileiros - 2001-2007. http://18.104.22.168/content/aplicacao/eventos/forum bnb2011/docs/2011_uma_analise_mult.pdf
Tsuneyoshi, T., Hashimoto, A. and Haneda, S. (2012) Quantitative Evaluation of Nation Stability, Journal of Policy Modeling, Vol.34, No.1, pp.132-154.
United Nations (1954) Report on International Definition and Measurement of Standards and Levels of Living. New York.
United Nations Development Programme (1990, 1991, 1994, 1999, 2004, 2010) Human Development Report. New York: OUP.
United Nations Economic and Social Council (1975) Developing Countries and Level of Development. New York: United Nations.
Velázquez, J.J.N. (2009) Estado actual y nuevas aproximaciones a la medición de la pobreza Estudios De Economia Aplicada, Vol.27, No.2, pp.325-344.
Wolbring, G. (2011) Hearing beyond the Normal Enabled by Therapeutic Devices: The Role of the Recipient and the Hearing Profession, Neuroethics, DOI 10.1007/s12152-011-9120-x Springerlink.com. http://www.springerlink.com/content/d33v333q2768155x/fulltext.pdf
Zarzosa, P. (1996) Aproximacio´n a la medicio´n del bienestar social. Secretariado de Publicaciones e intercambio científico, Universidad de Valladolid.
Zorondo-Rodrıguez, F., Gomez-Baggethun, E., Demps, K., Ariza-Montobbio, P., Claude Garcıa, C. and Reyes-Garcıa, V. (2012) What Defines Quality of Life? The Gap between Public Policies and Locally Defined Indicators among Residents of Kodagu, Karnataka (India), Social Indicators Research. DOI: 10.1007/s11205-012-9993-z http://www.springerlink.com/content/ k4143tk635pjn1w5/fulltext.pdf