Advances in sub national measurement of the Human Development Index

This paper surveys the main informational, conceptual and theoretical adjustments made to the HDI in the Mexican Human Development Reports and presents a way in which the calculation of the HDI could be carried out to the individual level. First, informational changes include redistributing government oil revenues from oil producing regions to the rest of the country in order to obtain a better picture of available resources and imputing per capita average household income to all municipalities combining census and income surveys. Also, state information is used to set counterfactuals about the first effects of internal migration on development, and municipal data is applied to decompose inequality indices to identify the sources and regions contributing to overall human development inequality. Second, conceptual adjustments consider introducing two additional dimensions to the HDI: being free from local crime and the absence of violence against women. Third, a key theoretical contribution from the Mexican National Reports to the HDI literature is the proposal of an inequality sensitive development index based on the concept of generalized means. Finally, the proposed disaggregation of the HDI at the household and individual level allows analyzing development levels for subgroups of population either by age, ethnic condition, sex and income or HDI deciles across time.