Tuesday, October 06, 2009
Bryan Caplan also wrote against HDI, making several of the same points. These are widely known problems within the economics profession (and particularly to development economists, few of whom use HDI in empirical analysis.) But Bryan Roberts notes, I think correctly:
It seems strange that the HDI has been so strongly criticized in the academic profession and yet continues to enjoy such a high degrees of public prominence. One reason that helps explain this is that many intuitively believe that GDP is an incomplete measure of welfare, and the HDI attempts to construct a better measure of welfare that incorporates highly plausible non-income variables.And Bryan Caplan notes that the way this is done is to use a measure that tells us how Scandinavian a country is; this seems to be the motivation that John finds in HDI. Let's put it this way: If Denmark (or Finland, Norway or Sweden) is so much happier than we are, why is their suicide rate higher?