Regional development in advanced countries: A within-country application of the Human Development Index for Austria

Since its implementation in 1990 the human development index (HDI), the flagship indicator of multidimensional development, has attracted a great deal of attention and critics in academic, political and media circles. It initiated a new stage in the discussion of appropriate indicators to measure socioeconomic development. Until now, the vast majority of empirical work using the HDI-concept takes a cross country perspective, mainly on a world wide, but also on world region scales. We add additional insights to the HDI-concept by applying it to regional differences in the socioeconomic development in a highly developed country. Thereby, a modified version of the HDI, called RDI, is applied to recent cross section data at the district level for Austria. There exists considerably heterogeneity across districts in the RDI and its components. Our Theil-decomposition reveals that the overwhelming part of the observed heterogeneity is based on differences within provinces (96 percent), although the differences in life expectancy between the provinces explain a substantial part of the overall heterogeneity in this indicator (54 percent). JEL classification: O10, O15, O18