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A sequential benefit-of-the-doubt composite indicator

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  • Walheer, Barnabé

Abstract

In many contexts, performances are measured by aggregating indicators. To do so, practitioners have to choose how to normalize and weight the selected indicators. A popular method is the benefit-of-the-doubt (BoD) which constructs composite indicators based on relative weights and avoids normalization. When dealing with panel data, the BoD computes composite indicators using contemporaneous data only. A consequence is that composite indicators are over-estimated because the accumulation of best practices is ignored. Inspired by the production economics literature, we suggest new sequential composite indicators keeping the BoD spirit. These indicators are not based on contemporaneous data but include current and past information. By comparing the two approaches, we define the new concept of knowledge accumulation ratio. We use the sequential composite indicators to evaluate the vulnerability, readiness, and resilience to climate change of more than 180 countries over the 1995–2020 period. Our results highlight two main groups of countries: those with great need of new investments and an urgency for adaptation, and those well positioned but with some adaptation challenges.

Suggested Citation

  • Walheer, Barnabé, 2024. "A sequential benefit-of-the-doubt composite indicator," European Journal of Operational Research, Elsevier, vol. 316(1), pages 228-239.
    • Handle: RePEc:eee:ejores:v:316:y:2024:i:1:p:228-239
    DOI: 10.1016/j.ejor.2024.01.029
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