Creating Composite Indicators with DEA and Robustness Analysis: the case of the Technology Achievement Index
Composite indicators are regularly used for benchmarking countries’ performance, but equally often stir controversies about the unavoidable subjectivity that is connected with their construction. Data Envelopment Analysis helps to overcome some key limitations, viz., the undesirable dependence of final results from the preliminary normalization of sub-indicators, and, more cogently, from the subjective nature of the weights used for aggregating. Still, subjective decisions remain, and such modelling uncertainty propagates onto countries’ composite indicator values and relative rankings. Uncertainty and sensitivity analysis are therefore needed to assess robustness of final results and to analyze how much each individual source of uncertainty contributes to the output variance. The current paper reports on these issues, using the Technology Achievement Index as an illustration.factor is more important in explaining the observed progress.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +32-(0)16-32 67 25
Fax: +32-(0)16-32 67 96
Web page: http://www.econ.kuleuven.ac.be/ew/academic/econover/default.htmEmail:
More information through EDIRC
|Order Information:|| 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.:
- Storrie, Donald & Bjurek, Hans, 2000. "Benchmarking European labour market performance with efficiency frontier techniques," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 00-211, Social Science Research Center Berlin (WZB).
- Knox Lovell, C. A. & Pastor, Jesus T. & Turner, Judi A., 1995. "Measuring macroeconomic performance in the OECD: A comparison of European and non-European countries," European Journal of Operational Research, Elsevier, vol. 87(3), pages 507-518, December.
- Sarrico, C. S. & Dyson, R. G., 2004. "Restricting virtual weights in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 159(1), pages 17-34, November.
- SIMAR, Léopold & WILSON, Paul, 1995.
"Sensitivity Analysis to Efficiency Scores : How to Bootstrap in Nonparametric Frontier Models,"
CORE Discussion Papers
1995043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
- Simar, L. & Wilson, P.W., . "Sensitivity analysis of efficiency scores: how to bootstrap in nonparametric frontier models," CORE Discussion Papers RP -1304, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975, March.
- M. Desai, S. Fukuda-Parr, C. Johansson, and F. Sagasti, 2002. "Measuring Technology Achievement of Nations and the Capacity to Participate in the Network Age," Human Development Occasional Papers (1992-2007) HDOCPA-2002-22, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
- Cazals, Catherine & Florens, Jean-Pierre & Simar, Leopold, 2002. "Nonparametric frontier estimation: a robust approach," Journal of Econometrics, Elsevier, vol. 106(1), pages 1-25, January.
- 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.
- Laurens Cherchye & Knox Lovell & Wim Moesen & Tom Van Puyenbroeck, 2005.
"One Market, One Number? A Composite Indicator Assessment of EU Internal Market Dynamics,"
Public Economics Working Paper Series
ces0513, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
- Cherchye, Laurens & Knox Lovell, C.A. & Moesen, Wim & Van Puyenbroeck, Tom, 2007. "One market, one number? A composite indicator assessment of EU internal market dynamics," European Economic Review, Elsevier, vol. 51(3), pages 749-779, April.
- Laurens Cherchye & & Timo Kuosmanen, 2002.
"Benchmarking Sustainable Development: A Synthetic Meta-index Approach,"
0210001, EconWPA, revised 08 Oct 2002.
- Cherchye, Laurens & Kuosmanen, Timo, 2004. "Benchmarking Sustainable Development: A Synthetic Meta-index Approach," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Michael Freudenberg, 2003. "Composite Indicators of Country Performance: A Critical Assessment," OECD Science, Technology and Industry Working Papers 2003/16, OECD Publishing.
- Atkinson, Tony & Cantillon, Bea & Marlier, Eric & Nolan, Brian, 2002. "Social Indicators: The EU and Social Inclusion," OUP Catalogue, Oxford University Press, number 9780199253494, March.
- Léopold Simar, 2003. "Detecting Outliers in Frontier Models: A Simple Approach," Journal of Productivity Analysis, Springer, vol. 20(3), pages 391-424, November.
- 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.
- Meghnad Desai & Sakiko Fukuda-Parr & Claes Johansson & Fransisco Sagasti, 2002. "Measuring the Technology Achievement of Nations and the Capacity to Participate in the Network Age," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 3(1), pages 95-122.
- M. Saisana & A. Saltelli & S. Tarantola, 2005. "Uncertainty and sensitivity analysis techniques as tools for the quality assessment of composite indicators," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(2), pages 307-323.
When requesting a correction, please mention this item's handle: RePEc:wpe:papers:ces0613. 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: (Kristof Bosmans)
If references are entirely missing, you can add them using this form.