An Assessment of Weighting Methodologies for Composite Indicators: The case of the Index of Economic Well-being
The Index of Economic Well-Being (IEWB) – a composite indicator consisting of consumption, wealth, equality, and economic security – underwent several changes in the weighting of its components. For example, the final aggregation of the IEWB was changed to equal weighting after the IEWB was criticized for having a bias against sustainability; however, all weighting schemes have both advantages and shortcomings. To isolate the preferred ordinal ranking for the results, strong and weak dominance rules were established for countries across several observed weighting schemes, and each of these rules were ranked in all possible ways. An 'iterative dominance equilibrium' was computed for comparison to observed weighting schemes. Constrained data envelopment analysis (CDEA) performed best, yet CDEA is not ideal for comparisons across countries. Among explicit weights, the original weights of the IEWB were best. Although the original weights are supported, they were controversial – a shift to equal weights mitigated this controversial – it appears equal weights remain least objectionable.
|Date of creation:||Dec 2012|
|Contact details of provider:|| Postal: 151 Slater Street, Suite 710, Ottawa, ON K1P 5H3|
Web page: http://www.csls.ca/
More information through EDIRC
|Order Information:|| Web: http://www.csls.ca Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laurens Cherchye & Wim Moesen & Tom Van Puyenbroeck, 2003.
"Legitimately Diverse, yet Comparable: On Synthesising Social Inclusion Performance in the EU,"
Public Economics Working Paper Series
ces0301, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
- Laurens Cherchye & Wim Moesen & Tom Puyenbroeck, 2004. "Legitimately Diverse, yet Comparable: On Synthesizing Social Inclusion Performance in the EU," Journal of Common Market Studies, Wiley Blackwell, vol. 42(5), pages 919-955, December.
- Koen DECANCQ & María Ana LUGO, 2010.
"Weights in multidimensional indices of well-being: an overview,"
Working Papers Department of Economics
ces10.06, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Koen Decancq & María Ana Lugo, 2013. "Weights in Multidimensional Indices of Wellbeing: An Overview," Econometric Reviews, Taylor & Francis Journals, vol. 32(1), pages 7-34, January.
- DECANCQ, Koen & LUGO, Maria Ana, "undated". "Weights in multidimensional indices of wellbeing: an overview," CORE Discussion Papers RP 2493, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Giuseppe Nicoletti & Stefano Scarpetta & Olivier Boylaud, 2000. "Summary Indicators of Product Market Regulation with an Extension to Employment Protection Legislation," OECD Economics Department Working Papers 226, OECD Publishing.
- Laurens Cherchye & Wim Moesen & Nicky Rogge & Tom Van Puyenbroeck & Michaela Saisana & A. Saltelli & R. Liska & S. Tarantola, 2006. "Creating Composite Indicators with DEA and Robustness Analysis: the case of the Technology Achievement Index," Public Economics Working Paper Series ces0613, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
- 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.
- R. J. Rummel, 1967. "Understanding factor analysis," Journal of Conflict Resolution, Peace Science Society (International), vol. 11(4), pages 444-480, December.
- Charles I. Jones & Peter J. Klenow, 2010.
"Beyond GDP? Welfare across Countries and Time,"
NBER Working Papers
16352, National Bureau of Economic Research, Inc.
- Lars Osberg & Andrew Sharpe, 2010. "The Index of Economic Well-Being," Challenge, M.E. Sharpe, Inc., vol. 53(4), pages 25-42, July.
- Doyle, John R., 1995. "Multiattribute Choice for the Lazy Decision Maker: Let the Alternatives Decide!," Organizational Behavior and Human Decision Processes, Elsevier, vol. 62(1), pages 87-100, April.
- Lars Osberg & Andrew Sharpe, 2005. "How Should We Measure The "Economic" Aspects Of Well-Being?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 311-336, 06.
When requesting a correction, please mention this item's handle: RePEc:sls:resrep:1210. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CSLS)
If references are entirely missing, you can add them using this form.