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A common weight MCDA-DEA approach to construct composite indicators

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  • Hatefi, S.M.
  • Torabi, S.A.
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    Abstract

    A common weight multi criteria decision analysis (MCDA)-data envelopment analysis (DEA) approach is proposed to construct composite indicators (CIs). The proposed MCDA-DEA model enables the construction of CIs among all entities via a set of common weights. The model is capable to discriminate entities which receive CI score of 1, i.e., the efficient entities leading to determination of a single best entity. Common weights structure of the proposed model has more discriminating power when compared to those obtained by previous DEA-like models. In order to validate the proposed MCDA-DEA model, it is applied to two case studies taken from the literature to construct two well-known CIs, i.e., Sustainable Energy Index (SEI) and Human Development Index (HDI). Both the robustness and discriminating power of the proposed method are studied through these case studies and tested by Spearman's rank correlation coefficient. The results reveal several merits of the proposed method in constructing CIs.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 70 (2010)
    Issue (Month): 1 (November)
    Pages: 114-120

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    Handle: RePEc:eee:ecolec:v:70:y:2010:i:1:p:114-120

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    Web page: http://www.elsevier.com/locate/ecolecon

    Related research

    Keywords: Composite indicators Data envelopment analysis Common weights Multi criteria decision analysis;

    References

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    Cited by:
    1. Stéphane Blancard & Jean-François Hoarau, 2011. "Optimizing the new formulation of the United Nations' human development index: An empirical view from data envelopment analysis," Economics Bulletin, AccessEcon, vol. 31(1), pages 989-1003.
    2. Goletsis, Y. & Chletsos, M., 2011. "Measurement of development and regional disparities in Greek periphery: A multivariate approach," Socio-Economic Planning Sciences, Elsevier, vol. 45(4), pages 174-183, December.
    3. Ernest Reig-Martínez, 2013. "Social and Economic Wellbeing in Europe and the Mediterranean Basin: Building an Enlarged Human Development Indicator," Social Indicators Research, Springer, vol. 111(2), pages 527-547, April.
    4. Dong, Fengxia & Mitchell, Paul D. & Hurley, Terrance M. & Frisvold, George B., 2012. "Quantifying Farmer Adoption Intensity for Weed Resistance Management Practices and Its Determinants," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 125194, Agricultural and Applied Economics Association.
    5. Chris Tofallis, 2013. "An automatic-democratic approach to weight setting for the new human development index," Journal of Population Economics, Springer, vol. 26(4), pages 1325-1345, October.
    6. Zhang, Hai-Ying & Ji, Qiang & Fan, Ying, 2013. "An evaluation framework for oil import security based on the supply chain with a case study focused on China," Energy Economics, Elsevier, vol. 38(C), pages 87-95.
    7. Ernest Reig, 2012. "Building an Enlarged Human Development Indicator: Europe and the Southern Mediterranean Basin," Working Papers 1203, Department of Applied Economics II, Universidad de Valencia.

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