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Geometric composite indicators with compromise Benefit-of-the-Doubt weights

Pim Verbunt and Nicky Rogge

European Journal of Operational Research, 2018, vol. 264, issue 1, 388-401

Abstract: This paper builds on Van Puyenbroeck and Rogge's (2017) ‘indirect’ multiplicative Benefit-of-the-Doubt (BoD) index number framework, in which the linear, data-driven BoD-model is used to estimate the importance of various sub-indicators within a geometric composite index (CI). We present an integrated framework that combines optimistic and pessimistic BoD-based weighting that enables to (1) establish the degree of unbalance in countries’ policy portfolio mix, (2) identify multiple underlying factors to explain inter-temporal evolution, and (3) explain for differences in country policy performances under the different weighting schemes following a multiplicative Bortkiewicz decomposition. In doing so, we use alternative optimistic and pessimistic BoD-models as existing models suffer from potential drawbacks in the identification of a country's comparative strengths and weaknesses. We illustrate our results with social inclusion data for the EU-countries for the period 2008-2013.

Keywords: Data Envelopment Analysis; Composite indicator; BoD; Index number theory; Social inclusion (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:ejores:v:264:y:2018:i:1:p:388-401