This paper focuses on the construction of a composite indicator for the knowledge based economy using imprecise data. Specifically, for some indicators we only have information on the bounds of the interval within which the true value is believed to lie. The proposed approach is based on a recent offspring in the Data Envelopment Analysis literature. Given the setting of evaluating countries, this paper discerns a ‘strong country in weak environment’ and ‘weak country in strong environment’ scenario resulting in respectively an upper and lower bound on countries’ performance. Accordingly, we derive a classification of ‘benchmark countries’, ‘potential benchmark countries’, and ‘countries open to improvement’.
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Find related papers by JEL classification: C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data
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