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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- 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.
- Laurens Cherchye & Erwin Ooghe & Tom Puyenbroeck, 2008.
"Robust human development rankings,"
The Journal of Economic Inequality,
Springer;Society for the Study of Economic Inequality, vol. 6(4), pages 287-321, December.
- Mark McGillivray & Howard White, 1993. "Measuring development? The UNDP's human development index," Journal of International Development, John Wiley & Sons, Ltd., vol. 5(2), pages 183-192, 03.
- Miles Cahill, 2005. "Is the Human Development Index Redundant?," Eastern Economic Journal, Eastern Economic Association, vol. 31(1), pages 1-5, Winter.
- Boland, Philip J. & Proschan, Frank, 1988. "Multivariate arrangement increasing functions with applications in probability and statistics," Journal of Multivariate Analysis, Elsevier, vol. 25(2), pages 286-298, May.
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