Measuring human development via data envelopment analysis: the case of Asia and the Pacific

The United Nations Development Program introduced in 1990 the Human Development Index (HDI), which ever since is published annually in the Human Development Report. In this paper, the assessment of the HDI is reconsidered in the light of data envelopment analysis (DEA). The new approach is applied to the countries of the regional aggregate of Asia and the Pacific. Human development is benchmarked on the basis of empirical observations of best practice countries. First, on the same line with HDI, we develop a DEA-like linear programming model to assess the relative performance of the countries in terms of human development. Then we extend our calculations with a post-DEA goal-programming model to derive estimates of a new development index by using optimal weights for the socioeconomic indicators. Finally, we estimate the relative efficiency of the countries in converting income to human development. We develop and solve for this purpose a pure DEA model with variable returns to scale.