Transcript Peter Jozan

Measuring and Fostering the Progress of Societies:
A New Approach for CIS and Eastern European Countries
Moscow, 29-30 September 2008
The Modified Human Development Index (MHDI) and its
Applicability for Measuring Progress of Societies,
the Hungarian Experience
Péter Józan M.D, Ph.D., D.Sc.
Hungarian Central Statistical Office,
Center for Social Studies at the Hungarian Academy of Sciences
The projects of the Hungarian Central Statistical Office
(HCSO), with respect to the Global OECD Project in general and
to its New Regional Approach in particular are connected to the
issue of Session 3. “What aspects of progress are the most
important for CIS and Eastern European Countries… and how do
we measure them?”
Here may I quote the economist-philosopher Amartya
Sen1: “There is, in fact, something of a gap… between the
tradition of evaluative statistics, on the one hand, and views of
progress on the other, advanced by visionary social scientists.”
According to William H. Draper2 III, “Over the last three
decades, a new concept has gained traction, positing that while
growth is absolutely necessary for development, it is not
sufficient… people must be at the center of development. The aim
is to offer people more choices and opportunities to make their
own decisions for long, healthy and creative lives.” The variables
are, among others, “to have a sustainable livelihood and earn
money, the ability to live a long and healthy life and to have
access to decent schooling… Human development means more
than the intrinsic value of personal fulfillment. An economy that
hopes to stay competitive amid globalization must draw on
everyone’s talents.”
1, 2
The Measure of America, American Human Development Report 2008–2009,
Foreword.
Returning to Amartya Sen’s dichotomous approach, the
Hungarian Central Statistical Office is attempting to put evidence
based statistical data on a common denominator with the outlook
of the “visionary social scientists”. This involves work in two
areas to draw up a system of indicators measuring human
development.
The outcome of the work is a well-structured set of nearly
two hundred human development indicators appropriate
– after suitable selection – for the study of any major social area.
The system of indicators has already been subject to debate in
the Hungarian Academy of Sciences, and on 18 September this
year the HCSO organised a one-day conference to discuss the
main points of the working document, with the participation of Mr.
E. Giovannini.
Work is also in progress on a new version of the UNDP
human development index (HDI). The HDI is chiefly based on
globalization considerations, and the modified version is
designed to be more appropriate for measuring human
development in industrial and post-industrial societies. I am
going to summarize this latter approach.
Below is an outline of the modifications made to the UNDP
HDI to take account of European conditions, and a brief discussion
of their applicability.
1. The index designed within the HCSO has the name of
modified human development index (MHDI).
2. The MHDI is a composite indicator with three
components:
– Gross income (before taxation) (GI) per capita: GIPC;
– Percentage of adults in the population 25 years old
and older with tertiary educational attainment (PATE)
– Life expectancy at birth.
3. Each component has equal weight in the composite
index.
4. The GIPC was chosen in preference to GDP per capita (used
by the UNDP) because it is available every year in local
administrative units-1, Budapest districts and even the
smallest villages (local administrative units-2), whereas
GDP is calculated only for countries, regions and counties.
At the level of regions (NUTS-2) and counties (NUTS-3), the
correlation coefficients for the strength of relationship
between per capita GDP and per capita GI are 0,96759,
p<0,0001 and 0,92019, p<0,0001 respectively. This confirms
the ability of the latter to substitute for the former. (Fig. 1.)
Figure 1.
Relationship between GDP per capita and gross income (before
taxation) GI per capita at NUTS-3 level (counties and Budapest), 2005
700
Fejér
Komárom-Esztergom
Pest
650
Győr-Moson-Sopron
Vas
Central-Transdanubia
GI per capita (1000 HUF)
Northern-Transdanubia
Veszprém
600
Hungary
Zala
Heves
550
Csongrád
Tolna
Baranya
Northern-Hungary
Nógrád
500
Southern-Transdanubia
Jász-Nagykun-Szolnok
Békés
450
Hajdú-Bihar
Southern Great Plain
Borsod-Abaúj-Zemplén
Bács-Kiskun
Somogy
Northern Great Plain
Szabolcs-Szatmár-Bereg
400
1 000
1 200
1 400
1 600
1 800
2 000
GDP per capita (1000 HUF)
Correlation coefficient: 0,92; p < 0,0001
NUTS-3: counties and Budapest.
NUTS-2: regions.
Calculation for NUTS-3 only.
In terms of values the Central-Hungary region and Budapest are outliers, therefore they cannot be seen in the figure.
2 200
2 400
5. Calculation of the education index (EI) does not take account of
the literacy of the adult population, because it may be assumed
that the proportion of adults in the developed, and specifically
European, countries who can read and write (adult literacy index)
is nearly a hundred per cent. The qualifications of people who
have passed through primary and secondary enrolment are also
of limited significance3. The proportion of the population 25
years old and older with tertiary educational attainment, i.e. those
with the highest level of skills, is an indicator which has been
found
capable
of
revealing
differences
in
skills
among
observational units (including all local administrative units 1).
3
Both adult literacy and primary and secondary enrolment are relevant indicators
in less developed countries. There was therefore good reason for using them in
the UNDP’s HDI. In developed countries, these indicators, especially adult literacy,
are probably irrelevant.
6. Life expectancy at birth expresses mortality in the measured
period regardless of sex and age group. It is the most reliable,
accurate, indirect, standardized indicator of health.
7. The MHDI is given on a conversion scale of 0 to 100 which
combines the component indices representing three segments
of human affairs.
8. In the HCSO study, the MDHI was calculated for the years 2003-6.
The per capita GI was taken for 2005, the proportion of the
population 25 years old and older with tertiary educational
attainment was taken from the 2001 census data, and the life
expectancy at birth was calculated for the years 2003-6.
9. Level of development rankings may be set up for the regions
(NUTS-2), the counties (NUTS-3), the local administrative units-1
(LAU-1) and the Budapest districts (see attached figures 2. 3.).
Figure 2.
Modified Human Development Index (MHDI) in the Local Adminsitrative
Units1 (LAU1), 2003–06.
MHDI in per cent
Figure 3.
Modified Human Development Index (MHDI) in the districts of
Budapest 2003–06.
MHDI in per cent
10 It is possible to calculate the strength of relationship between
the MHDI, as the independent variable, and various dependent
variables. These latter may be indicators of the political,
economic, demographic, social, cultural, health and physical
environment.
For example, strength of relationship may be quantified between
the MHDI and indicators of party preferences; capital investment;
unemployment; the ageing index; dependency ratio; fertility;
internal migration balance; premature deaths (under the age of
70); deaths amenable by medical intervention (indirect indicator
of health care effectiveness); cause-specific mortalities (cancer
and
cardiovascular
pollution.
mortality);
morbidity;
environmental
11. The MHDI may be used to track the long term development of a
country or countries, regions, counties and local administrative
units-1.
12. One component index of the MHDI, the per capita GI, examines
income inequalities in an ecological context by distinguishing
between local administrative units-1 in the top and bottom
deciles and the top and bottom quintiles, and local administrative
units-1 under the poverty threshold. Consequently the MHDI can
be used to measure social inequalities.
13. The MHDI is more appropriate to measure the well-being of
nations in advanced, particularly European countries, than
the index used by the UNDP, which incorporates aspects
specific to less developed countries. Another advantage
of the MHDI is that fewer data are required to calculate it
than the HDI, and these data are available in every
advanced country.
14. These features of the MHDI make it appropriate for
international comparison of well-being of nations in a
bilateral and multilateral context and among the countries
of the European Union, the OECD and the United Nations
Economic Commission for Europe.
15. The MHDI has its limitations. It measures well-being, education
and longevity with qualified objectivity, but says nothing about
other aspects of human existence. The Human Development
Report (HDR) gives information on this. It is hoped that the MHDI
devised in the HCSO will contribute to production of the HDR.
THANK YOU FOR YOUR ATTENTION!