Classification, Detection and Consequences of Data Error: Evidence from the Human Development Index

54 Pages Posted: 6 Dec 2010 Last revised: 14 Apr 2023

See all articles by Hendrik Wolff

Hendrik Wolff

University of Washington - Department of Economics; IZA Institute of Labor Economics

Howard Chong

University of California, Berkeley

Max Auffhammer

University of California, San Diego (UCSD) - Department of Economics; University of California, Berkeley - Department of Agricultural & Resource Economics

Date Written: December 2010

Abstract

We measure and examine data error in health, education and income statistics used to construct the Human Development Index. We identify three sources of data error which are due to (i) data updating, (ii) formula revisions and (iii) thresholds to classify a country's development status. We propose a simple statistical framework to calculate country specific measures of data uncertainty and investigate how data error biases rank assignments. We find that up to 34% of countries are misclassified and, by replicating prior studies, we show that key estimated parameters vary by up to 100% due to data error.

Suggested Citation

Wolff, Hendrik and Chong, Howard and Auffhammer, Maximilian and Auffhammer, Maximilian, Classification, Detection and Consequences of Data Error: Evidence from the Human Development Index (December 2010). NBER Working Paper No. w16572, Available at SSRN: https://ssrn.com/abstract=1719932

Hendrik Wolff (Contact Author)

University of Washington - Department of Economics

Box 353330
Seattle, WA 98195-3330
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Howard Chong

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Maximilian Auffhammer

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-3383 (Phone)
858-834-7040 (Fax)

University of California, Berkeley - Department of Agricultural & Resource Economics ( email )

Berkeley, CA 94720
United States

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