Statistics, GDP, HDI, and the Social Progress Index

That’s quite a comprehensive title to this post, isn’t it? A more serious social scientist would have prefaced the title with some cryptic phrase ending with a colon, and then added the information-possessing title. So, why don’t I do that. What about “Nibbling on Figs in an Octopus’ Garden: Explanation, Statistics, GDP, Democracy, and the Social Progress Index?” That sounds social ‘sciencey’ enough, I think.

Now, to get to the point of this post: one of the most important research topics in international studies is human welfare, or well-being. Before we can compare human welfare cross-nationally, we have to begin with a definition (which will guide the data-collecting process). What is human welfare? There is obviously some global consensus as to what that means, but there are differences of opinion as to how exactly human welfare should be measured. (In IS210, we’ll examine these issues right after the reading break.) For much of the last seven decades or so, social scientists have used economic data (particularly Gross Domestic Product (GDP) per capita as a measure of a country’s overall level of human welfare. But GDP measures have been supplemented by other factors over the years with the view that they leave out important components of human welfare. The UN’s Human Development Index is a noteworthy example. A more recent contribution to this endeavour is the Social Progress Index (SPI) produced by the Social Progress Imperative.

How much better, though, are these measures than GDP alone? Wait until my next post for answer. But, in the meantime, we’ll look at how “different” the HDI and the SPI are. First, what are the components of the HDI?

“The Human Development Index (HDI) measures the average achievements in a country in three basic dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living.”

So, you can see that it goes beyond simple GDP, but don’t you have the sense that many of the indicators–such as a long and healthy life–are associated with GDP? And there’s the problem of endogeneity–what causes what?

The SPI is a recent attempt to look at human welfare even more comprehensively, Here is a screenshot showing the various components of that index:

We can see that there are some components–personal rights, equity and inclusion, access to basic knowledge, etc.,–that are absent from the HDI. Is this a better measure of human well-being than the HDI, or GDP alone? What do you think?