Clustering of Countries in the World Based on the Legatum Prosperity Index and Determining Iran's Position

Roya Akhavan Kharazian (), Bahar Hafezi (), Mostafa Rajabi () and Maryam Sharifdoust ()
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Roya Akhavan Kharazian: PhD student in health economic, Department of Economics, Khomeinishahr Branch, Islamic Azad University, Isfahan, Iran
Bahar Hafezi: Assistant Professor, Department of Economics, Khomeinishahr Branch, Islamic Azad University, Isfahan, Iran
Mostafa Rajabi: Assistant Professor, Department of Economics, Khomeinishahr Branch, Islamic Azad University, Isfahan, Iran
Maryam Sharifdoust: Assistant Professor, Department of Mathematics & Statistics, Khomeinishahr Branch, Islamic Azad University, Isfahan, Iran

Quarterly Journal of Applied Theories of Economics, 2025, vol. 11, issue 4, 105-130

Abstract: The main objective of the present research is to analyze the level of well-being of countries worldwide based on 12 components of the Legatum Prosperity Index and to determine Iran's position through clustering methods. In this research, using the K-Means algorithm in SPSS software, the clustering of countries worldwide based on 12 components of the Legatum Prosperity Index from 2007 to 2023 (for 167 countries) has been conducted to identify hidden patterns among countries and Iran's position within these clusters. The research results indicate that, based on classifying countries into three clusters, Iran falls into a cluster with a medium level of welfare. Additionally, these results suggest that Iran is most similar to the countries of South Africa, Algeria, and Turkmenistan. The most essential variables in differentiating countries include "infrastructure and market access, education, and living conditions," the least important variables are assessed as "social capital and the natural environment." Based on the research findings, it is necessary to consider the multidimensional aspects of welfare to increase the level of welfare in Iran. Therefore, economic policymakers should make greater efforts in open economy and inclusive societies.

Keywords: Dimensions of Prosperity index; cluster analysis; welfare; Legatum Prosperity Index (search for similar items in EconPapers)
JEL-codes: E22 F21 K23 (search for similar items in EconPapers)
Date: 2025
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