Creating composite indicators with DEA and robustness analysis: the case of the Technology Achievement Index

Laurens Cherchye, W Moesen, N Rogge (), T Van Puyenbroeck (), M Saisana, Andrea Saltelli, Roman Liska and S Tarantola
Additional contact information
W Moesen: Catholic University of Leuven
N Rogge: Catholic University of Leuven
T Van Puyenbroeck: Catholic University of Leuven
M Saisana: Joint Research Centre, European Commission
S Tarantola: Joint Research Centre, European Commission

Journal of the Operational Research Society, 2008, vol. 59, issue 2, 239-251

Abstract: Abstract Composite indicators (CIs) are often used for benchmarking countries' performance, but they frequently stir controversies about the unavoidable subjectivity in their construction. Data Envelopment Analysis helps to overcome some key limitations, as it does not need any prior information on either the normalization of sub-indicators or on an agreed unique set of weights. Still, subjective decisions remain, and such modelling uncertainty propagates onto countries' CI scores and rankings. Uncertainty and sensitivity analysis are therefore needed to assess the robustness of the final outcome and to analyse how much each source of uncertainty contributes to the output variance. The current paper reports on these issues, using the Technology Achievement Index as an illustration.

Keywords: Data Envelopment Analysis; composite indicator construction; robustness analysis (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (130)

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Working Paper: Creating Composite Indicators with DEA and Robustness Analysis: the case of the Technology Achievement Index (2006)
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DOI: 10.1057/palgrave.jors.2602445

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