The choice of principal variables for computing the Physical Quality of Life Index

Abstract

The present paper addresses the issue of choice of principal variables for computing the Physical Quality of Life Index (PQLI). To this end, the variable selection strategy considered by Jolliffe, which utilizes the principal components approach, is applied to the data for 150 countries reported by Morris. To test the robustness of our results the methodology is also applied to four different subsamples of the 150 countries (low income, lower middle income, upper middle income and high income). All the results indicate the need to retain only one of the three components of the PQLI, namely the literacy index. Thus, a simpler PQLI series based solely on the literacy index would be cheaper to compute without loss of too much information.