IDEAS home Printed from https://ideas.repec.org/a/spr/soinre/v150y2020i2d10.1007_s11205-020-02310-1.html
   My bibliography  Save this article

A trichotomic segmentation approach for estimating composite indicators

Author

Listed:
  • Yiannis Smirlis

    (University of Piraeus)

Abstract

Composite indicators (CIs) are commonly used for benchmarking of countries over the years, summarizing in a single measurement, complex social, economic, environmental etc. concepts by involving several thematically related sub-indicators. When estimating CIs and for a few specific countries, it is possible to have a strong indication and belief about their performance, prior to obtaining their scores. Based on that, a number of countries are likely to occupy the top-ranking positions; some will remain at the bottom list, while others may range in intermediate places. This initial preference information imposes a trichotomic segmentation that divides the countries under assessment into categories of superior, inferior and of ambiguous future performance. In this paper, we introduce the trichotomic segmentation as initial preference information to estimate the values of the CIs. We build on the popular Benefit of the Doubt (BoD) method with common weights and develop a two-goal linear programming model, that next to the evaluation of the common weights for the sub-indicators, estimates cut-off points for the CI values that distinguish the superior and inferior countries. The proposed model maintains the advantages of the common variable weighting and produces scores that induce better discrimination of the countries, having also a significant correlation with the original CI scores. The proposed methodology is applied to reassess the Digital Economy and the Society Index.

Suggested Citation

  • Yiannis Smirlis, 2020. "A trichotomic segmentation approach for estimating composite indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(2), pages 393-410, July.
  • Handle: RePEc:spr:soinre:v:150:y:2020:i:2:d:10.1007_s11205-020-02310-1
    DOI: 10.1007/s11205-020-02310-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11205-020-02310-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s11205-020-02310-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. William W. Cooper & Lawrence M. Seiford & Joe Zhu (ed.), 2011. "Handbook on Data Envelopment Analysis," International Series in Operations Research and Management Science, Springer, number 978-1-4419-6151-8, December.
    2. Hatefi, S.M. & Torabi, S.A., 2010. "A common weight MCDA-DEA approach to construct composite indicators," Ecological Economics, Elsevier, vol. 70(1), pages 114-120, November.
    3. Salvatore Greco & Alessio Ishizaka & Menelaos Tasiou & Gianpiero Torrisi, 2019. "On the Methodological Framework of Composite Indices: A Review of the Issues of Weighting, Aggregation, and Robustness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 61-94, January.
    4. Zhou, P. & Ang, B.W. & Poh, K.L., 2007. "A mathematical programming approach to constructing composite indicators," Ecological Economics, Elsevier, vol. 62(2), pages 291-297, April.
    5. 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.
    6. C Kao & H-T Hung, 2005. "Data envelopment analysis with common weights: the compromise solution approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(10), pages 1196-1203, October.
    7. Jaszkiewicz, A. & Ferhat, A. B., 1999. "Solving multiple criteria choice problems by interactive trichotomy segmentation," European Journal of Operational Research, Elsevier, vol. 113(2), pages 271-280, March.
    8. R. Allen & A. Athanassopoulos & R.G. Dyson & E. Thanassoulis, 1997. "Weights restrictions and value judgements in Data Envelopment Analysis: Evolution, development and future directions," Annals of Operations Research, Springer, vol. 73(0), pages 13-34, October.
    9. Cristina Bernini & Andrea Guizzardi & Giovanni Angelini, 2013. "DEA-Like Model and Common Weights Approach for the Construction of a Subjective Community Well-Being Indicator," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(2), pages 405-424, November.
    10. D K Despotis, 2005. "A reassessment of the human development index via data envelopment analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(8), pages 969-980, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Charlotte Wüst & Nicky Rogge, 2022. "How is the European Union progressing towards its Europe 2020 targets? A benefit-of-the-doubt window analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(2), pages 405-438, May.
    2. Flavio Comim, 2021. "A Poset-Generalizability Method for Human Development Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(3), pages 1179-1198, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jesús Peiró‐Palomino & Andrés J. Picazo‐Tadeo & Vicente Rios, 2020. "Well‐being in European regions: Does government quality matter?," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 555-582, June.
    2. Oliveira, Renata & Zanella, Andreia & Camanho, Ana S., 2019. "The assessment of corporate social responsibility: The construction of an industry ranking and identification of potential for improvement," European Journal of Operational Research, Elsevier, vol. 278(2), pages 498-513.
    3. Jesús Peiró-Palomino & Andrés J. Picazo-Tadeo, 2018. "Assessing well-being in European regions. Does government quality matter?," Working Papers 2018/06, Economics Department, Universitat Jaume I, Castellón (Spain).
    4. Jorge Guardiola & Andrés J. Picazo-Tadeo, 2013. "Weighting life domains with Data Envelopment Analysis," Working Papers 1311, Department of Applied Economics II, Universidad de Valencia.
    5. Salvatore Greco & Alessio Ishizaka & Menelaos Tasiou & Gianpiero Torrisi, 2019. "On the Methodological Framework of Composite Indices: A Review of the Issues of Weighting, Aggregation, and Robustness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 61-94, January.
    6. Jorge Guardiola & Andrés Picazo-Tadeo, 2014. "Building Weighted-Domain Composite Indices of Life Satisfaction with Data Envelopment Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(1), pages 257-274, May.
    7. Afsharian, Mohsen & Ahn, Heinz & Harms, Sören Guntram, 2021. "A review of DEA approaches applying a common set of weights: The perspective of centralized management," European Journal of Operational Research, Elsevier, vol. 294(1), pages 3-15.
    8. Koronakos, Gregory & Smirlis, Yiannis & Sotiros, Dimitris & Despotis, Dimitris K., 2020. "Assessment of OECD Better Life Index by incorporating public opinion," Socio-Economic Planning Sciences, Elsevier, vol. 70(C).
    9. Hussein Sayed & Ramadan Hamed & Samaa Hazem Hosny & Alyaa Hegazy Abdelhamid, 2018. "Avoiding Ranking Contradictions in Human Development Index Using Goal Programming," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(2), pages 405-442, July.
    10. Hussein Sayed & Ramadan Hamed & Mohamed Ramadan & Samaa Hosny, 2015. "Using Meta-goal Programming for a New Human Development Indicator with Distinguishable Country Ranks," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(1), pages 1-27, August.
    11. Mariano, Enzo Barberio & Sobreiro, Vinicius Amorim & Rebelatto, Daisy Aparecida do Nascimento, 2015. "Human development and data envelopment analysis: A structured literature review," Omega, Elsevier, vol. 54(C), pages 33-49.
    12. Jesús Peiró-Palomino & Andrés J. Picazo-Tadeo, 2018. "OECD: One or Many? Ranking Countries with a Composite Well-Being Indicator," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(3), pages 847-869, October.
    13. Peiró-Palomino, Jesús & Picazo-Tadeo, Andrés J. & Tortosa-Ausina, Emili, 2021. "Measuring well-being in Colombian departments. The role of geography and demography," Socio-Economic Planning Sciences, Elsevier, vol. 78(C).
    14. Van Puyenbroeck, Tom & Rogge, Nicky, 2017. "Geometric mean quantity index numbers with Benefit-of-the-Doubt weights," European Journal of Operational Research, Elsevier, vol. 256(3), pages 1004-1014.
    15. Claire Goavec & Jean-François Hoarau, 2015. "Structural economic vulnerability and tourism dependence: new assessment for small island developing economies [Vulnérabilité économique structurelle et dépendance touristique : quels enseignements," Post-Print hal-01454720, HAL.
    16. Stéphane Blancard & Maximin Bonnet & Jean-François Hoarau, 2020. "The specific role of agriculture for economic vulnerability of small island spaces," Working Papers hal-02441237, HAL.
    17. Giménez, Víctor & Thieme, Claudio & Prior, Diego & Tortosa-Ausina, Emili, 2022. "Evaluation and determinants of preschool effectiveness in Chile," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    18. Gulati, Rachita & Kattumuri, Ruth & Kumar, Sunil, 2020. "A non-parametric index of corporate governance in the banking industry: An application to Indian data," Socio-Economic Planning Sciences, Elsevier, vol. 70(C).
    19. Gulati, Rachita & Charles, Vincent & Kumar, Sunil, 2024. "School education development index: A meta-frontier range directional measure benefit-of-the-doubt model," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    20. Blancard, Stéphane & Hoarau, Jean-François, 2013. "A new sustainable human development indicator for small island developing states: A reappraisal from data envelopment analysis," Economic Modelling, Elsevier, vol. 30(C), pages 623-635.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:soinre:v:150:y:2020:i:2:d:10.1007_s11205-020-02310-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.