Constructing the Human Development Index: Effect of the Adaptive Multi-Step Formulation of Utility Function—A Research Note

UNDP's Human Development Index has been based on Atkinson's multi-step utility function (until 1999). It has been pointed out that an adaptive approach could be superior to Atkinson's function and can take care of its conceptual and fundamental weaknesses for constructing the Human Development Index. The present article analytically establishes certain results and empirically examines variations in the ranks of the countries due to the adaptive multi-step formulation utility function when used in place of the approaches employed by UNDP in the Human Development Reports.