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Broad-based index for measurement of development

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Abstract

Measurement of development is important for economists, academicians and policy makers as it deals with broader issues such as satisfaction of basic human needs and goals, well-being, environment protection and of course economic growth. There have been several attempts to construct various indices for measuring development ever since the use of growth in GDP was found to be inadequate. While the use of composite indices was a significant step in this direction, the existing ones are widely criticized on its limited scope while capturing the various dimensions of development process. Moreover, they also lacked in its methodology of aggregation and weighting scheme, where equal weights for its components were taken in most of the cases. In this study, we make an attempt to construct a broad-based development index (BBDI) capturing the overall development process under various dimensions such as society, sustainability, economy and institutions. Apart from its wide coverage, our index is also different from the existing ones in terms of its weighting, where we have used principal component analysis for deriving the variable weights. BBDI is then aggregated for 102 countries measuring their development process from 1996 through 2015.

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Notes

  1. Sen (1983).

  2. Detailed official report on calculation of HDI can be obtained from the United Nations Development Programme, Human Development reports at http://hdr.undp.org/en/content/human-development-index-hdi.

  3. Can be accessed from WHO/Millennium Development Goals https://www.who.int/topics/millennium_development_goals/about/en/.

  4. Can be accessed from UNDP/Sustainable Development Goals https://www.undp.org/content/undp/en/home/sustainable-development-goals.html.

  5. Booysen (2002), OECD (2008) and Greco et al. (2018) have presented a detailed discussion on various weighting schemes for the construction of composite index.

  6. Human development Report, UNDP (2016).

  7. Handbook on Constructing Composite Indicator methodology and user guide, OECD 2008.

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Acknowledgements

The authors would like to thank the editor and the anonymous referees for their valuable suggestions that helped to improve the manuscript.

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  1. Department of Economics, Sri Sathya Sai Institute of Higher Learning, Prasanthi Nilayam, Anantapur, Andhra Pradesh, 515134, India

    Sayel Basel, K. U. Gopakumar & R. Prabhakara Rao

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  1. Sayel Basel
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  2. K. U. Gopakumar
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  3. R. Prabhakara Rao
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Correspondence to K. U. Gopakumar.

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Appendix

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Table 6 The broad-based development index.
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Basel, S., Gopakumar, K.U. & Rao, R.P. Broad-based index for measurement of development. J. Soc. Econ. Dev. 22, 182–206 (2020). https://doi.org/10.1007/s40847-020-00093-2

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