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Stéphane Blancard and Jean-François Hoarau
''Optimizing the new formulation of the United Nations' human development index: An empirical view from data envelopment analysis.''
( 2011, Vol. 31 No.1 )
In this paper, we propose a new way to simulate an optimal Human Development Index [HDI]. Indeed, the formulation of the original HDI established by the United Nations Development Programme [UNDP] relies on a major methodological shortcoming, namely the contestable assumption that all component indices have the same weights. So, we implement a new approach to determine the optimal weights of each sub-indicator in the light of Data Envelopment Analysis [DEA]. Accordingly, we follow the multiplicative optimization approach introduced by Zhou et al. (2010), to assess robustly the relative performance of a set of 169 economies around the world in terms of human development. Finally, the new world ranking is close to and highly correlated with the standard HDI one, giving then some support to the equal weighting method adopted by the UNDP.
Keywords: Human development index, data envelopment analysis, multiplicative optimization approach, optimal weights
JEL: O1 - Economic Development: General
C6 - Mathematical Methods and Programming: General
Manuscript Received : Dec 28 2010 Manuscript Accepted : Mar 25 2011

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