Causal Relationship among Various Development Indices: A Panel Study

The concept of development has been regarded as a broader phenomenon encompassing various interrelated factors leading to improvement in the overall human wellbeing. So, it is important to understand the interlinkages between various dimensions of development. The present study was an attempt to analyze the causal relationship between the four aspects of development measured by the indices, namely the Economic Development Index (EDI), Social Development Index (SDI), Environment Development Index (ENDI), and Institutional Development Index (IDI) for a panel of 102 counties from 1996 to 2015. The long run relationship between these indices throught hepane lARDL model were also examined. There sults indicated that there existed abi-directional causal relationship between EDI and SDI, IDI and SDI, ENDI and SDI, and between IDI and ENDI. The one-way causality runs from IDI to EDI and ENDI to EDI. Further, given the nature of the variables considered here, panel autoregressive distributed lag models were used to examine the long run relationship between the indices of development. The results showed that the impact of development indices with one another was statistically significant in the long run.