Composite Indices: Rank Robustness, Statistical Association and Redundancy
This 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.
|Date of creation:||Apr 2011|
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- Laurens Cherchye & Erwin Oghe & Tom Van Puyenbroeck, 2005.
"Robust human development rankings,"
Public Economics Working Paper Series
ces0516, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
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- 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.
- Miles Cahill, 2005. "Is the Human Development Index Redundant?," Eastern Economic Journal, Eastern Economic Association, vol. 31(1), pages 1-5, Winter.
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