Impact of Gender Development Index on Human Development Index and Gross Domestic Product Per Capita

Abstract

In this paper, author wishes to find out the relationship among the Gender Development Index, Human Development Index and the Gross Domestic Product per capita of the 12 developed countries during 1990-2015 with the help of econometric models such as fixed effect panel regression, Fisher Johansen panel co-integration, panel vector error correction model and Wald test. The paper concludes that one per cent increase in GDI per year led to 0.1143% increase in GDP per capita and 0.0191% increase in HDI per year significantly during 1990-2015 which were found by fixed effect panel regression. Fisher-Johansen panel co-integration test confirms that there is one co-integrating equation among GDP per capita, HDI and GDI during the survey period. The co-integrating equation tends to equilibrium which indicates that there is long run association among them. From the System equation of VECM it was verified that there are long run causalities running from HDI and GDP per capita to GDI. Error correction process showed that the speed of adjustment is 95.25% per year which is significant. The Wald test shows that there are no short causalities running from HDI and GDP per capita to GDI and vice versa but there is short run causality running from HDI to GDP per capita. Over all, the VECM is stable, non stationary, non-normal and serially correlated.