Measuring and monitoring human welfare: How credible are the data in the UNDP's human development reports?

Abstract

The broad objectives of the Human Development Report (HDR) and the estimates of human wellbeing are to identify policies that reduce poverty, economic and gender inequalities and increase human wellbeing. Since its inception in 1990, the HDR and the methodological and measurement issues relating to the now well known Human Development Index (HDI) have undergone several transformations. This paper empirically examines the reliability of databases from HDRs with a special focus on the estimations methodology and data revisions of the HDI, and the recent growth trends in the HDI and real income. This paper notes that the databases in the HDRs exhibit significant measurement errors and inadequacies. The measurement errors are more conspicuous in cases of data pertaining to low-income developing countries.