Non-compensability in Composite Indicators: A Robust Directional Frontier Method

Francesco Vidoli, Elisa Fusco () and Claudio Mazziotta ()

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2015, vol. 122, issue 3, 635-652

Abstract: This paper follows the research mainstream aimed to link the efficiency frontier approaches and the composite indicators (CI) methods. More in detail, the main drawbacks of the CI methods based on Benefit of the Doubt (BoD) approach are the sensitivity to the outliers, the perfect compensability and the lack of consideration about the marginal rate of substitution between simple indicators. Following Simar and Vanhems (J Econ 166(2):342–354, 2012 ) results, we propose a weighting method that bypassing all previous shortcomings suggests a comprehensive approach to construct robust and non-compensatory composite indicators. This approach is based on the integration of BoD by a directional distance function. In order to better highlight the advantages and limitations of our approach we present two applications: in the first one we test our approach on simulated data, while in the second one we consider the supply level of the Italian national health service with the aim to analyse the regional differences and verify the robustness of the results. Copyright Springer Science+Business Media Dordrecht 2015

Keywords: Composite indicators; Non-compensability; Directional distance functions; Benefit of the Doubt; Italian public health service. (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11205-014-0710-y (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:soinre:v:122:y:2015:i:3:p:635-652

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11135

DOI: 10.1007/s11205-014-0710-y

Access Statistics for this article

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement is currently edited by Filomena Maggino

More articles in Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().