Revealed Comparative Economies of Scope and Development Index

Abstract

In this note, we attempt to construct some summary statistic to measure economic development and make comparisons across countries. A development index is defined in terms of both "scale" and "scope". "Scale" is measured by output per capita. "Scope" is measured by revealed comparative economies of scope, which in turn is measured by the ratio of the variety of exports over the variety of imports for a country. Using purchasing power parity and the Standard International Trade Classification, we have computed the development index for forty countries.