There’s been some interesting recent commentary on the Human Development Index. But first, some background. This index is calculated each year by the U.N. Development Program as a summary indicator of “Human Development,” combining data on life expectancy at birth, adult literacy, educational enrollment, and average income (measured as G.D.P. per capita). And earlier this week, Catherine Rampell noted a recent effort by the SSRC-funded American Human Development Project to develop a Human Development Index, for U.S. states. Philosophically, it is an attempt to broaden the development debate beyond G.D.P. But does it succeed?
Andrew Gelman isn’t convinced by this effort. Over at fivethirtyeight.com, he takes a close look at this new state-based index, comparing a state’s ranking in this new state-based human development measure and its ranking on average income. He finds yields an 86 percent correlation. Forget the high-falutin’ language of “human development,” Gelman argues, “You’re pretty much just mapping state income and giving it a fancy transformation and a fancy new name.” Over at Economix, Catherine Rampell responded, noting that the “U.N.’s index was not designed to capture the levels of variation that would occur within a single country. It was designed to make international comparisons.”
Given this debate, I wondered whether Gelman’s critique might also apply to the U.N.’s original cross-national Human Development Index, so I downloaded the latest data. The graph below compares a country’s ranking on the human development index with its ranking on average income. The correlation between the two is even stronger — a massive 95 percent! For all but a handful of countries, your ranking on average income is the same as your ranking on this multi-dimensional index.
For comparison, here’s Gelman’s graph for U.S. states. (The only way in which it differs is that Gelman gives the richest state the lowest ranking, rather than the highest ranking.)
For all the work that goes into the Human Development Index, it just doesn’t tell you much that you wouldn’t learn from simple comparisons of G.D.P. per capita. But you do get the veneer of something broader, with a normatively loaded name for this index.
But there’s another reason to be suspicious of the state-based human development index. Some commentators have been comparing the scores of individual states on the state-based index with the international index, which yields newsworthy bites, like “Mississippi has an H.D.I. level roughly on par with that of Turkey.” But the two indices aren’t comparable. Dig deep into the methods used to construct the AHDP’s state-based index, and you’ll find that not only are the inputs different, but so are the formulae. In principle, one could build indices to compare Mississippi and Turkey, but comparing different indices is comparing apples and oranges.
Economix has a longer discussion on the relevant data issues, here.
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Looking at your country comparison, it seems to me there would still be value in the process. With 95% correlation, shouldn’t we look at the outliers to the correlation? What is it that GNQ, GAB, BWA, and AGO are doing that puts them so low on mortality/education rankings relative to their GDP? And what is Cuba doing to be on the opposite side of the curve?
Thank you. Neat graph.
When you get into the methodologies of rankings, you find many are garbage with a political agenda. And many don’t disclose their methods at all. I recently took apart an annual survey on women’s property rights and other gender issues, issued by an institute in Jerusalem. One of the metrics was political stability and the method is described as: “Combines several indicators which measure perceptions of the likelihood that the government in power will be destabilized or overthrown by possibly unconstitutional and/or violent means, including domenstic (sic) violence and terrorism.” On this measure, the US ranked 50 out of 115 countries. Tunisia, by comparison, was 59. I’m not saying the results were explicitly biased but rather that the underlying method must be lousy.
As for garbage methodology, look at college rankings. One of my favorite is an engineering ranking that consists of a questionnaire sent to the Dean and 2 senior faculty. What does that measure?
BTW, another good example of a simple relation that gets obscured is earnings of graduates from public schools. By far the main contributor is location, which anyone who reads this post should know. Go to school in a higher income state and you make more money.
I disagree with the conclusion the HDI is without use. High correlation is to be expected – obviously richer countries (or states) – i.e. those with high GDP – are more likely to provide the education, healthcare, social services etc. needed to produce a high HDI. So it is not in the slightest bit surprising that you develop a strong correlation.
Furthermore, it is even less surprising that the international figures develop an even higher correlation. When samples have a clear underlying relationship with one another (which HDI and GDP clearly do, not least because the former includes the latter as one of its metrics), then increasing the sample size will always serve to increase the overall correlation – much like financial portfolio diversification.
As such, it should be obvious that HDI is not meant to be producing spectacularly different trends – it is meant to be used alongside GDP to illustrate intricacies in the socio-economic structure and institutions of countries (or states) – especially those based on inequality. Notice how lots of the “stray” nations on your comparative graph are those rich with resources? GDP would suggest that they are happily middle-of-the-road developing nations. But HDI illustrates that the wealth is not being translated into social development, which implies dictatorships, corruption, and/or massive inequality. Which stacks up with the evidence.
Applying this to US states, compare Hawaii with Wyoming. GDP would suggest that they should be very similar in development. But look at the intricacies – the real story – and it becomes clear that the institutional structure and or socio-economic makeup of Wyoming is not conducive to applying their extra wealth to social development. Thus it scores an HDI of 12, vs Hawaii’s 45.
I whole-heartedly disagree with the conclusion that HDI is just a regurgitation of GDP. In is a tool to be used in parallel with GDP, and as such is very useful indeed.
Dean Rodrigues
Pembroke College, Oxford
Hmmmm….
So the most liberal states scored the highest….no surprise.
“nate” asked: “What is it that GNQ, GAB, BWA, and AGO are doing that puts them so low on mortality/education rankings relative to their GDP? ”
Presumably HIV prevalence is a big part of the answer here. I don’t know what GNQ and GAB are; but BWA = Botswana, ZAF = South Africa, NAM = Namibia, AGO = Angola (?), SWZ = Swaziland. Those countries have the highest HIV infection rates in the world, and consequently have relatively low life expectancies from birth. This explanation deals with many of the outliers.
@Eric Jones
Who do you think is pushing this index, liberals or conservatives?
I think this just shows there are other factors that we feel might be considered in something called a “human development” index. I think we have a gut feeling that GDP shouldn’t so accurately measure our humanity, but why? If so, then what are those factors that aren’t dependent upon GDP like education is?
Should happiness be included? Stress and anxiety? Crime rates? Freedom of the press?
I have no idea, but if we’re not OK with such a correlation to GDP, then why not? There must be a reason.
Eric,
that is the whole reason this has come about, and the reason why it is garbage. The point is that it was made by someone trying to make red states look third-world.
I’m a liberal and I know people with college educations voted Dem in ’08. No duh. Read the 538 post.
The thing to take away from this is how much the other two thirds of the index (education and life expectancy) are dependant on GDP/person.