Maximizing human development

Engineer, Merwan and King, Ian (2013) Maximizing human development. Canadian Journal of Economics, 46 2: 497-525. doi:10.1111/caje.12021


Author Engineer, Merwan
King, Ian
Title Maximizing human development
Journal name Canadian Journal of Economics   Check publisher's open access policy
ISSN 0008-4085
1540-5982
Publication date 2013-05
Year available 2013
Sub-type Article (original research)
DOI 10.1111/caje.12021
Open Access Status Not Open Access
Volume 46
Issue 2
Start page 497
End page 525
Total pages 29
Place of publication Hoboken, NJ, United States
Publisher Wiley-Blackwell Publishing
Language eng
Abstract The Human Development Index (HDI) is widely used as a measure of well-being. We examine the allocations implied by the maximization of this index using a standard growth model. Maximization leads to consumption (excluding education and health expenditures) being pushed to minimal levels. It also leads to the overaccumulation of education and/or health capital and possibly physical capital, relative to the standard golden rule. We propose an alternative specification for the HDI, where consumption replaces income as a proxy for decent standard of living. Maximization of this alternative implies a 'human development golden rule' which balances consumption, education and health expenditure. We advocate the method of optimization subject to constraints for revealing the policy implications of taking an achievement measure and its underlying philosophy seriously.
Keyword Human Development Index (HDI)
Standard growth model
Consumption
Standard of living
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: School of Economics Publications
 
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Created: Thu, 17 Mar 2016, 16:13:34 EST by Karen Warren on behalf of Learning and Research Services (UQ Library)