To consider different aspects of life when measuring human development, the United Nations Development Program introduced the Human Development Index (HDI). The HDI is a composite index of socioeconomic indicators that reflect three major dimensions of human development: longevity, knowledge and standard of living. In this paper, the assessment of the HDI is reconsidered in the light of data envelopment analysis (DEA). Instead of a simple rank of the countries, human development is benchmarked on the basis of empirical observations of best practice countries. First, on the same line as HDI, we develop a DEA-like model to assess the relative performance of the countries in human development. Then we extend our calculations with a post-DEA model to derive global estimates of a new development index by using common weights for the socioeconomic indicators. Finally, we introduce the transformation paradigm in the assessment of human development. We develop a DEA model to estimate the relative efficiency of the countries in converting income to knowledge and life opportunities.
We introduce in this paper the global efficiency approach as a means to improve the discriminating power of Data Envelopment Analysis (DEA). To discriminate further among the DEA efficient units, we deal only with the units that can maintain their efficiency score under common weighting structures. Then we proceed further to ranking the whole set of DEA efficient units. We compare the global efficiency approach with the multi-criteria DEA and the cross-efficiency approaches on the basis of characteristic numerical examples drawn from the literature.
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