AN APPLICATION OF CHOQUET INTEGRAL IN HDI and L-HDI CALCULATION

Abstract

This thesis proposes an enhanced framework for measuring human development by applying the Choquet Integral (CI) to the calculation of both the Human Development Index (HDI) and a newly formulated Logistics-Augmented Human Development Index (LHDI). Traditional HDI computation methods, such as the Geometric Mean (GM), assume independence among its three core dimensions—health, education, and income—and fail to capture the complex interactions that often exist among them. This can lead to oversimplified assessments and imbalanced interpretations of development. To address this limitation, the thesis introduces a CI-based methodology that incorporates interaction indices and empirically derived weights from Multiple Linear Regression (MLR), enabling a more nuanced and realistic measure of development. A key contribution of this study is the inclusion of a Logistics Index (LI)—constructed from normalized Timeliness and Infrastructure indicators from the World Bank’s Logistics Performance Index (LPI) as a fourth dimension in the LHDI framework. This integration reflects the growing recognition of infrastructure and service delivery as essential enablers of human development, particularly in facilitating access to education, healthcare, and income-generating opportunities. The thesis advances both theoretical and methodological dimensions by extending the use of the Choquet Integral beyond its conventional applications in decision-making to the domain of composite index construction. The proposed model is empirically validated using global development data, and results demonstrate that the CI-based approach not only provides a more equitable and interaction-aware representation of development but also better identifies dimension-specific weaknesses across countries. This allows for more targeted and balanced policy insights. In conclusion, the study presents a robust and innovative framework for human development measurement capturing interdependencies among dimensions and integrating logistics as a critical fourth pillar. This refined approach offers substantial potential for informing strategic development planning and resource allocation by delivering a more comprehensive and accurate assessment of human progress.