Composite Indices: Rank Robustness, Statistical Association and Redundancy
AbstractThis paper evaluates the robustness of rankings obtained from composite indices that combine information from two or more components via a weighted sum. It examines the empirical prevalence of robust comparisons using the method proposed by Foster, McGillivray and Seth (2010). Indices examined are the Human Development Index, the Index of Economic Freedom and the Environmental Performance Index. Key theoretical results demonstrate links between the prevalence of robust comparisons, Kendall's tau rank correlation coefficient, and statistical association across components. Implications for redundancy among index components are also examined.
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Bibliographic InfoPaper provided by The George Washington University, Institute for International Economic Policy in its series Working Papers with number 2011-19.
Length: 24 pages
Date of creation: Apr 2011
Date of revision:
composite index; multidimensional index; Human Development Index; rank robustness; positive association; Kendall's tau; redundancy; prevalence function.;
Other versions of this item:
- James E. Foster & Mark McGillivray & Suman Seth, 2013. "Composite Indices: Rank Robustness, Statistical Association, and Redundancy," Econometric Reviews, Taylor & Francis Journals, vol. 32(1), pages 35-56, January.
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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2011-18, The George Washington University, Institute for International Economic Policy.
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