IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/73276.html
   My bibliography  Save this paper

Methodological challenges in building composite indexes: Linking theory to practice

Author

Listed:
  • Santeramo, Fabio Gaetano

Abstract

Composite indicators are emerging in several fields and disciplines as appealing method to synthesize a multitude of information, in a compact, single, and unique way. The process of aggregating heterogeneous information is itself very challenging and exposed to numerous threats. The chapter deepens on the methodological challenges that scientists, analysts, and final users must be aware of for a correct interpretation of the composite indexes. By mean of a worked example on the construction of composite indicators for food security, the chapter concludes that while different normalization and weighting approaches do not alter composite indicators, data imputation and aggregation methods are the most crucial steps: different methods convey very different results. For instance, the adoption of different aggregation procedures may largely alter the rankings based on composite indicators. In sum, the analysis shows that the index construction decisions matter and comment on policy and practical implications for the construction of composite indicators.

Suggested Citation

  • Santeramo, Fabio Gaetano, 2016. "Methodological challenges in building composite indexes: Linking theory to practice," MPRA Paper 73276, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:73276
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/73276/1/MPRA_paper_73276.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paolo Paruolo & Michaela Saisana & Andrea Saltelli, 2013. "Ratings and rankings: voodoo or science?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(3), pages 609-634, June.
    2. Carlo Cafiero, 2013. "What do we Really Know about Food Security?," NBER Working Papers 18861, National Bureau of Economic Research, Inc.
    3. Per Pinstrup-Andersen, 2009. "Food security: definition and measurement," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 1(1), pages 5-7, February.
    4. Francesco Caracciolo & Fabio Gaetano Santeramo, 2013. "Price Trends and Income Inequalities: Will Sub-Saharan Africa Reduce the Gap?," African Development Review, African Development Bank, vol. 25(1), pages 42-54, March.
    5. Gabbert, Silke & Weikard, Hans-Peter, 2001. "How widespread is undernourishment?: A critique of measurement methods and new empirical results," Food Policy, Elsevier, vol. 26(3), pages 209-228, June.
    6. Maricic, Milica & Bulajic, Milica & Dobrota, Marina & Jeremic, Veljko, 2016. "Redesigning The Global Food Security Index: A Multivariate Composite I-Distance Indicator Approach," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(1), pages 1-18, January.
    7. Carman, Katherine Grace & Zamarro, Gema, 2016. "Does Financial Literacy Contribute To Food Security?," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(1), pages 1-19, January.
    8. Santeramo, Fabio Gaetano & Di Pasquale, Jorgelina & Contò, Francesco & Tudisca, Salvatore & Sgroi, Filippo, 2012. "Analyzing risk management in Mediterranean Countries: The Syrian perspective," MPRA Paper 49851, University Library of Munich, Germany.
    9. Michael Freudenberg, 2003. "Composite Indicators of Country Performance: A Critical Assessment," OECD Science, Technology and Industry Working Papers 2003/16, OECD Publishing.
    10. Renuka Mahadevan & Vincent Hoang, 2016. "Is There a Link Between Poverty and Food Security?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 179-199, August.
    11. Frederik Booysen, 2002. "An Overview and Evaluation of Composite Indices of Development," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 59(2), pages 115-151, August.
    12. Thomas W. Hertel, 2016. "Food security under climate change," Nature Climate Change, Nature, vol. 6(1), pages 10-13, January.
    13. Santeramo, Fabio Gaetano & Shabnam, Nadia, 2015. "The income-elasticity of calories, macro and micro nutrients: What is the literature telling us?," MPRA Paper 63754, University Library of Munich, Germany.
    14. Michela Nardo & Michaela Saisana & Andrea Saltelli & Stefano Tarantola & Anders Hoffman & Enrico Giovannini, 2005. "Handbook on Constructing Composite Indicators: Methodology and User Guide," OECD Statistics Working Papers 2005/3, OECD Publishing.
    15. Giuseppe Munda, 2012. "Choosing Aggregation Rules for Composite Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 109(3), pages 337-354, December.
    16. Eric Tate, 2012. "Social vulnerability indices: a comparative assessment using uncertainty and sensitivity analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 63(2), pages 325-347, September.
    17. Beck, Günther W. & Beyer, Robert C. M. & Kontny, Markus & Wieland, Volker, 2015. "Monetary Cross-Checking in Practice," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113126, Verein für Socialpolitik / German Economic Association.
    18. Santeramo, Fabio Gaetano, 2014. "On the composite indicators for food security: Decisions matter!," MPRA Paper 58955, University Library of Munich, Germany.
    19. Ouertani, Emna, 2016. "Food Security In Tunisia Within Water Scarcity The Relative Importance Of The Meat Sector," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(1), pages 1-20, January.
    20. Pemberton, Carlisle & Patterson-Andrews, Hazel & Sormeaux, Afiya De, 2016. "Relative Vulnerability Of Selected Caribbean States To Changes In Food Security Due To Tropical Storms And Hurricanes," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(1), pages 1-12, January.
    21. Dobrota, Marina & Martic, Milan & Bulajic, Milica & Jeremic, Veljko, 2015. "Two-phased composite I-distance indicator approach for evaluation of countries’ information development," Telecommunications Policy, Elsevier, vol. 39(5), pages 406-420.
    22. Giuseppe Munda & Michaela Saisana, 2011. "Methodological Considerations on Regional Sustainability Assessment Based on Multicriteria and Sensitivity Analysis," Regional Studies, Taylor & Francis Journals, vol. 45(2), pages 261-276.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Santeramo, Fabio Gaetano & Carlucci, Domenico & De Devitiis, Biagia & Seccia, Antonio & Stasi, Antonio & Viscecchia, Rosaria & Nardone, Gianluca, 2017. "Emerging trends in European food, diets and food industry," MPRA Paper 82105, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Santeramo, Fabio Gaetano, 2014. "On the composite indicators for food security: Decisions matter!," MPRA Paper 58955, University Library of Munich, Germany.
    2. Maricic, Milica & Bulajic, Milica & Dobrota, Marina & Jeremic, Veljko, 2016. "Redesigning The Global Food Security Index: A Multivariate Composite I-Distance Indicator Approach," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(1), pages 1-18, January.
    3. Milica Maricic & Jose A. Egea & Veljko Jeremic, 2019. "A Hybrid Enhanced Scatter Search—Composite I-Distance Indicator (eSS-CIDI) Optimization Approach for Determining Weights Within Composite Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(2), pages 497-537, July.
    4. Nadia Shabnam & Fabio Gaetano Santeramo & Zahid Asghar & Antonio Seccia, 2016. "The Impact of Food Price Crises on the Demand for Nutrients in Pakistan," Journal of South Asian Development, , vol. 11(3), pages 305-327, December.
    5. Luzzati, T. & Gucciardi, G., 2015. "A non-simplistic approach to composite indicators and rankings: an illustration by comparing the sustainability of the EU Countries," Ecological Economics, Elsevier, vol. 113(C), pages 25-38.
    6. Salvatore Greco & Alessio Ishizaka & Menelaos Tasiou & Gianpiero Torrisi, 2019. "On the Methodological Framework of Composite Indices: A Review of the Issues of Weighting, Aggregation, and Robustness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 61-94, January.
    7. Caccavale, Oscar Maria & Giuffrida, Valerio, 2020. "The Proteus composite index: Towards a better metric for global food security," World Development, Elsevier, vol. 126(C).
    8. Meital Izraelov & Jacques Silber, 2019. "An assessment of the global food security index," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 11(5), pages 1135-1152, October.
    9. Laurens CHERCHYE & Willem MOESEN & Nicky ROGGE & Tom VAN PUYENBROECK, 2009. "Constructing a knowledge economy composite indicator with imprecise data," Working Papers of Department of Economics, Leuven ces09.15, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    10. Greco, Salvatore & Ishizaka, Alessio & Tasiou, Menelaos & Torrisi, Gianpiero, 2019. "Sigma-Mu efficiency analysis: A methodology for evaluating units through composite indicators," European Journal of Operational Research, Elsevier, vol. 278(3), pages 942-960.
    11. O. Flores Baquero & J. Gallego-Ayala & R. Giné-Garriga & A. Jiménez-Fernández. Palencia & A. Pérez-Foguet, 2017. "The Influence of the Human Rights to Water and Sanitation Normative Content in Measuring the Level of Service," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(2), pages 763-786, September.
    12. Ricard Giné‐Garriga & Agustí Pérez‐Foguet, 2019. "Monitoring and targeting the sanitation poor: A multidimensional approach," Natural Resources Forum, Blackwell Publishing, vol. 43(2), pages 82-94, May.
    13. Nerfa, Lauren & Rhemtulla, Jeanine M. & Zerriffi, Hisham, 2020. "Forest dependence is more than forest income: Development of a new index of forest product collection and livelihood resources," World Development, Elsevier, vol. 125(C).
    14. Grupp, Hariolf & Schubert, Torben, 2010. "Review and new evidence on composite innovation indicators for evaluating national performance," Research Policy, Elsevier, vol. 39(1), pages 67-78, February.
    15. Riccardo Natoli & Segu Zuhair, 2011. "Measuring Progress: A Comparison of the GDP, HDI, GS and the RIE," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 103(1), pages 33-56, August.
    16. Fabio Gaetano Santeramo & Emilia Lamonaca, 2021. "Food Loss–Food Waste–Food Security: A New Research Agenda," Sustainability, MDPI, vol. 13(9), pages 1-7, April.
    17. Byomkesh Talukder & Keith W. Hipel & Gary W. vanLoon, 2017. "Developing Composite Indicators for Agricultural Sustainability Assessment: Effect of Normalization and Aggregation Techniques," Resources, MDPI, vol. 6(4), pages 1-27, November.
    18. Laurens Cherchye & Willem Moesen & Nicky Rogge & Tom Puyenbroeck, 2007. "An Introduction to ‘Benefit of the Doubt’ Composite Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 82(1), pages 111-145, May.
    19. Larisa Mihoreanu & Mariana Laura Cismas & Laura Maria Danila (Jianu), 2019. "Enlarging the Application of the Food Security Index at European Union Regions," Journal of Economic Development, Environment and People, Alliance of Central-Eastern European Universities, vol. 8(1), pages 38-51, March.
    20. Maričić Milica & Bulajić Milica & Radojičić Zoran & Jeremić Veljko, 2019. "Shedding Light on the Doing Business Index: a Machine Learning Approach," Business Systems Research, Sciendo, vol. 10(2), pages 73-84, September.

    More about this item

    Keywords

    Composite Indicator; Food Security; Data Aggregation; Data Imputation; Normalization; Weighting; FAO; Development; Economics;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:73276. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.