Vol 4, No 1 (2016)
Is Human Development Index or GDP More Relevant in Measuring World Income Inequalities?
Hasan Engin Duran
Abstract
The great majority of the studies in the field of international economic inequalities rely on “income data” where only few number of studies adopt conventional indicators of development (such as Human Development Index (HDI)). The aim of the current paper is to analyze the level and evolution of inequalities across 128 countries by using both GDP and HDI data and compare, in this way, the results from both variables. The period of analysis runs from 1990 to 2012. In terms of methodology, we employ Kernel Density estimations and cross sectional regressions to examine this issue. Our analyses indicate two important results. First, disparities in income and HDI have been shown to decline over the years. Second, there have been huge disparities in income but only moderate level of inequalities in development. In the light of our findings, we may consequently argue that either GDP data exacerbates the disparities or HDI underestimates it. Using only one type of measure may lead to distorted results.
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Keywords
World Economic Inequalities; Convergence; HDI; GDP; Kernel Density Estimation.
Publication information
Volume 4, Issue 1
Year of Publication: 2016
ISSN: 1857 - 8721
Publisher: EDNOTERA
How to cite
Duran, H.E.: Is Human Development Index or GDP More Relevant in Measuring World Income Inequalities?. Journal of Applied Economics and Business, Vol 4, No. 1, 5-12. (2016)