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An Index of the Quality of Life for European Countries: Evidence of Deprivation from EU-SILC Data

Listed author(s):
  • Riccardo Soliani


    (DIEM ¨C Faculty of Economics, Genova (Italy), Italy)

  • Alessia Di Gennaro


    (DIEM ¨C Faculty of Economics, Genova (Italy), Italy)

  • Enrico Ivaldi


    (DIEM ¨C Faculty of Economics, Genova (Italy), Italy)

Starting from EU-SILC data, a sample survey that defines the harmonised lists of target primary (annual) and secondary (every four years or less frequently) variables transmitted to Eurostat by the 27 countries, we have chosen a set of about fifty indicators on a qualitative basis. An exploratory factorial analysis led us to accept only eleven variables distributed around three principle components, assuming that each of them could become, after further inquiry, an index of deprivation. Then we carried out the factorial analysis on the three principle components just found. The distribution of the eleven remaining data can be roughly interpreted as follows: the first group indicates material deprivation; the second one social deprivation; the third one can be labelled as depending on economic policy. Three factorial indexes consist in the factor score resulting from the factorial analysis on the partial indicators summarizing information supplied by each variable; the sum of our three indicators offers a global index of the quality of life (QL-index), whose values can be classified in order to identify groups of countries with similar conditions. A map will be drawn to overview the condition of the countries considered. We will test the three obtained indicators with the Spearman rho, comparing it with the ranking score of the Human Development Index and the Inequality Adjusted Human Development Index of European countries. The expected result is quite high correlation between them, mainly for the material deprivation index. The correlation with the ranking score will allow us to compare the relation of HDI, our QL-index, and the three components of it considered separately. The comparison between the two, the HD Index and the QL-Index, should reveal that the latter is more correlated with the IHDI. The greater number of indicators in our index should improve its explaining power, taking into account also social dimensions not so relevant in the HDI. The articulation of our index makes it possible to analyse the phenomenon more precisely; at the same time, the sum of the three indicators could be a good validation of the HDI.

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Article provided by Better Advances Press, Canada in its journal Review of Economics & Finance.

Volume (Year): 2 (2012)
Issue (Month): (May)
Pages: 1-14

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Handle: RePEc:bap:journl:120201
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References listed on IDEAS
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  1. Romina Boarini & Marco Mira d'Ercole, 2006. "Measures of Material Deprivation in OECD Countries," OECD Social, Employment and Migration Working Papers 37, OECD Publishing.
  2. Henry Kaiser, 1958. "The varimax criterion for analytic rotation in factor analysis," Psychometrika, Springer;The Psychometric Society, vol. 23(3), pages 187-200, September.
  3. Lindert,Peter H., 2009. "Growing Public," Cambridge Books, Cambridge University Press, number 9780521529174.
  4. Angela Testi & Enrico Ivaldi, 2011. "Measuring Progress in Health through Deprivation Indexes," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 49-57, April.
  5. Atkinson, A B, 1997. "Bringing Income Distribution in from the Cold," Economic Journal, Royal Economic Society, vol. 107(441), pages 297-321, March.
  6. Mary Gregory & Miriam Beblo & Wiemer Salverda & Ioannis Theodossiou, 2009. "Introduction," Oxford Economic Papers, Oxford University Press, vol. 61(suppl_1), pages 1-10, April.
  7. Willem Adema, 2006. "Social Assistance Policy Development and the Provision of a Decent Level of Income in Selected OECD Countries," OECD Social, Employment and Migration Working Papers 38, OECD Publishing.
  8. Christopher T. Whelan & Brian Nolan & Bertrand Maitre, 2008. "Measuring Material Deprivation in the Enlarged EU," Papers WP249, Economic and Social Research Institute (ESRI).
  9. Guio, Anne-Catherine & Fusco, Alessio & Marlier, Eric, 2009. "A European Union Approach to Material Deprivation using EU-SILC and Eurobarometer data," IRISS Working Paper Series 2009-19, IRISS at CEPS/INSTEAD.
  10. Andrea Brandolini, 2007. "Measurement of income distribution in supranational entities: the case of the European Union," Temi di discussione (Economic working papers) 623, Bank of Italy, Economic Research and International Relations Area.
  11. Hogan J.W. & Tchernis R., 2004. "Bayesian Factor Analysis for Spatially Correlated Data, With Application to Summarizing Area-Level Material Deprivation From Census Data," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 314-324, January.
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