Measuring Development: An Inequality Dominance Approach (Themes in Economics)

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https://www.springer.com/gp/book/9789811561603 This book discusses how to measure the level of development of an economy, particularly, the task of ranking economies in terms of their development. In this context, development is defined as an increase in people’s level of wellbeing. The book emphasises that wellbeing is a multidimensional concept, and that it is important to ask how equitably the fruits of development are distributed, and as such it focuses on multidimensional, inequality-sensitive development ranking. Rather than using various specific development indices, which would lead to different development rankings for a country, the book proposes a dominance approach, which formulates conditions under which two economies can be ranked unambiguously, making it valid for all reasonable development indices. With the help of illustrative examples using real-world data, it demonstrates that such unambiguous rankings are possible, and that the proposed approach can be used to complement traditional approaches. An invaluable resource for researchers working in the field of development, the book will also appeal to practitioners engaged in measuring development. An excerpt from the book's Foreword:"[This book] is a comprehensive and valuable contribution to the literature on the measurement of inequality and the use of such measurement in the assessment of social welfare. I believe that it will be of much interest to researchers working on measures of inequality and social welfare as well as advanced graduate students who are looking for a solid introduction to this important area of normative economics." -          Prof. Prasanta K. Pattanaik, University of California, Riverside, California, U.S.A. Foreword Preface Acknowledgements of Reproduction Permissions Contents About the Author Abbreviations 1 Setting the Stage: Types of Measures and Alternative Notions of Development 1.1 Plan of the Chapter 1.2 Types of Measures 1.3 Alternative Notions of Development 1.3.1 Need for a Broad Notion of Development 1.3.2 The Utilitarian View 1.3.3 Preference-Based Approaches: A Dead End 1.3.4 Justice as Fairness: The Rawls Approach 1.3.5 Subjective Well-Being: Happiness and Related Issues 1.3.6 Fair Allocations 1.3.7 Basic Needs 1.3.8 The Capability Approach: Functionings and Capabilities 1.4 Choice of Functionings, Their Observable Indicators and Relative Weights 1.5 A Dominance Approach 1.6 Conclusion: Chapter Summary and Preview of the Rest of the Book 1.6.1 Summary of Chapter 1 1.6.2 A Preview of Subsequent Chapters References 2 Toward an Inequality-Sensitive Measure of Development: The Unidimensional Case 2.1 Introduction 2.2 Measuring Inequality 2.2.1 Conditions on Inequality Indices 2.2.2 Examples of Inequality Indices 2.2.3 Inequality Indices Derived from Development Indices 2.2.4 Multiplicity of Inequality Indices and the Problem of Ranking Income Vectors in Terms of Inequality 2.2.5 A Partial Solution: Lorenz Dominance 2.3 Back to the Measurement of Development 2.3.1 Inequality-Sensitive Development Indices: Three Problems 2.3.2 The Atkinson Theorem 2.3.3 Generalising the Utilitarian Framework 2.3.4 A Non-Paretian Framework: Scale Monotonicity 2.4 Conclusion References 3 Unidimensional Development Ranking and Fuzzy Lorenz Dominance 3.1 Introduction 3.2 Fixed Mean Comparisons 3.2.1 Fuzzy Lorenz Dominance 3.2.2 A Cardinal Approach 3.2.3 An Ordinal Approach 3.3 The General Case of Variable Mean Income 3.4 Conclusion Appendix: Fuzzy Sets and Relations References 4 Illustrative Applications of Unidimensional Development Indices 4.1 Introduction 4.2 Household Consumption Expenditure in India 4.3 Household Wealth in India 4.4 An International Cross-Section Perspective: Household Wealth in BRICS Countries 4.5 Conclusion References 5 Multidimensional Lorenz Dominance 5.1 Introduction 5.2 Notations, Definitions, etc. 5.3 “Candidate” Lorenz Dominance Relations 5.4 A Class of Multidimensional Lorenz Dominance Relations 5.5 Conclusion References 6 Multidimensional Inequality-Sensitive Development Ranking 6.1 Introduction 6.2 Notations 6.3 Conditions on a Multidimensional Inequality-Sensitive Development Index 6.3.1 Non-equity Conditions 6.3.2 Equity Conditions 6.4 Development Ranking 6.5 Incompleteness Revisited: A Partial Solution 6.6 Conclusion Appendix: Multidimensional Inequality Indices: A Unifying Approach Normatively Significant Multidimensional Inequality Indices Multidimensional Versions of Specific Unidimensional Inequality Indices Multidimensional Coefficient of Variation and Multidimensional Generalised Entropy Inequality Indices Other Multidimensional Inequality Indices Conclusion References 7 An Illustration: Multidimensional Development and Inter-State Inequality in India in the 2000s 7.1 Introduction 7.2 Units of Observation: The States of India 7.3 The Dimensions 7.4 What Do We Expect a Priori? 7.5 The Data 7.6 India 2004–05 and 2010–11: Inequality Ranking and Development Ranking 7.7 Conclusion References 8 Overview and Concluding Remarks 8.1 Overview 8.2 Other Ranking Rules 8.2.1 The Human Development Index 8.2.2 Better Life Index 8.2.3 Some Other Indices in the Academic Literature 8.3 Conclusion References Index