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Measuring Human Development: The Use of Principal Component Analysis in Creating an Environmental Index
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Statistics.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Statistics.
2011 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

In the current development debate, much critique has been directed towards the modern measures of welfare that attempt to assess human well-being according to more dimensions than just per capita income. One such measure is the United Nations Development Programme's Human Development Index (HDI), which is comprised by measures of education, health and income. The HDI has been subject to many evaluations concluding that it is intrinsically correlated with GDP, and is believed to possess poor statistical quality due to the arbitrary weighting of the included variables. It has also been proposed that the environment and its sustainability are of importance to human welfare, and should be included in measures of well-being. In this paper, Principal Component Analysis is performed on a number of environmental variables to create a scientifically weighted index that can be incorporated into composite welfare measures. Inclusion of the new environment index into the HDI greatly reduces the correlation between income and the index, as it incorporates environmental issues that are not significantly correlated with level of income.

Place, publisher, year, edition, pages
2011. , 29 p.
Keyword [en]
Principal Component Analysis, Human Development, HDI, Index, Environment, Spearman's Correlation Coefficient
National Category
Social Sciences
Identifiers
URN: urn:nbn:se:uu:diva-155893OAI: oai:DiVA.org:uu-155893DiVA: diva2:429133
Subject / course
Statistics
Uppsok
Social and Behavioural Science, Law
Supervisors
Examiners
Available from: 2011-09-27 Created: 2011-07-03 Last updated: 2011-09-27Bibliographically approved

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