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Multi-Dimensional Development – An Application of Fuzzy Set Theory to the Indian States

A., Rjumohan (2017): Multi-Dimensional Development – An Application of Fuzzy Set Theory to the Indian States.

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Abstract

Even though India has recently become one of the fastest growing economies of the world and one among the most important G-20 economies, in terms of many development indicators, India has not fared well. Ours is a country of wide diversity in regional, social, economic, political, and cultural dimensions. Different States with different policy mixes have witnessed very different outcomes over the years. Some States have focused only on growth and some States have won laurels in achieving the objectives of both growth and development simultaneously. Analysis of this diversity and disparity across the States in their performance would help us identify useful policies of development.

However, many concepts/predicates, such as poverty (or poor) and its opposite, development (or developed), used in economics are both vague/fuzzy and multi-dimensional and their analysis requires careful consideration of a graded membership. This study therefore employs the framework of fuzzy set theory in identifying and analysing the positions of different states in the development ladder, that is, their graded memberships in each development dimension and in aggregation.

The development dimensions that we consider are health, knowledge and standard of living. Note that these dimensions are latent factors, that is, unobservable; hence we have to use some indicators to proxy these development dimensions. The indicators of health dimension are: (i) Life expectancy at birth, (ii) Infant mortality rate, (iii) Birth rate, and (iv) Death rate. As an indicator of knowledge we take literacy rate, and that of standard of living, per capita net state domestic product at constant prices prices. The selected states are: Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, and West Bengal. The data have been sourced from the Planning Commission of India

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