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Building Weighted-Domain Composite Indices of Life Satisfaction with Data Envelopment Analysis

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  • Jorge Guardiola
  • Andrés Picazo-Tadeo

Abstract

The specialised literature has frequently addressed the relationship between life domains and people’s satisfaction with life. Some researchers have posed questions regarding the importance of domains, therefore interpreting them as weightings and creating domain satisfaction indices. This paper illustrates how Data Envelopment Analysis (DEA) and Multi-Criteria-Decision-Making (MCDM) techniques can be employed to compute domain-based composite indices of life satisfaction and weightings for life domains. Furthermore, an empirical application is performed on a sample of 178 people living in a rural community in Yucatan (Mexico). One of the main features of the aforementioned techniques is that weightings might differ from one individual to another. Accordingly, several weighting schemes are used to compute different life satisfaction indices, in addition to a constant equally-weighted index. Based on the goodness-of-fit criteria commonly used in this literature, our main result is that DEA-MCDM indicators of life satisfaction do not improve the relationship with self-reported life satisfaction in comparison to the equally-weighted index. Copyright Springer Science+Business Media Dordrecht 2014

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  • Jorge Guardiola & Andrés Picazo-Tadeo, 2014. "Building Weighted-Domain Composite Indices of Life Satisfaction with Data Envelopment Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(1), pages 257-274, May.
    • Handle: RePEc:spr:soinre:v:117:y:2014:i:1:p:257-274
    DOI: 10.1007/s11205-013-0346-3
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