Measuring the Distribution of Human Development: Methodology and an Application to Mexico

Abstract

The Human Development Index (HDI) improves upon per capita GDP as an indicator of development by incorporating information on health and education. However, like its predecessor, it fails to account for the inequality with which the benefits of development are distributed among the population. Subsequent work by Anand and Sen (1993) and Hicks (1997) has led to a useful distribution-sensitive measure of human development, but at the cost of a key property of the HDI that ensures consistency between regional and aggregate analyses. This paper presents a new parametric class of human development indices that includes the original HDI as well as a family of distribution sensitive indices that satisfy all the basic properties for an index of human development. An empirical application using the year 2000 Mexican Population Census data shows how the new measures can be applied to analyze the distribution of human development at the national level and for individual states.

Keywords: Human Development , Well-Being, Inequality, Generalized Means

JEL Classification: I30, I32, O10