Title: Creating Composite Indicators with DEA and Robustness Analysis: the Case of the Technology Achievement Index
Authors: CHERCHYE LaurensMOESEN WillemROGGE NickyVAN PUYENBROECK TomSAISANA MichaelaSALTELLI ANDREALISKA ROMANTARANTOLA STEFANO
Citation: JOURNAL OF THE OPERATIONAL RESEARCH SOCIETY vol. 59 p. 239-251
Publisher: PALGRAVE MACMILLAN LTD
Publication Year: 2008
JRC Publication N°: JRC32351
ISSN: 0160-5682
URI: http://www.palgrave-journals.com/jors
http://publications.jrc.ec.europa.eu/repository/handle/JRC32351
DOI: 10.1057/palgrave.jors.2602445
Type: Articles in Journals
Abstract: Composite indicators are regularly used for benchmarking countries performance, but equally often stir controversies about the unavoidable subjectivity that is connected with their construction. Data Envelopment Analysis helps to overcome some key limitations, viz., the undesirable dependence of final results from the preliminary normalization of sub-indicators, and, more cogently, from the subjective nature of the weights used for aggregating. Still, subjective decisions remain, and such modelling uncertainty propagates onto countries composite indicator values and relative rankings. Uncertainty and sensitivity analysis are therefore needed to assess robustness of final results and to analyze how much each individual source of uncertainty contributes to the output variance. The current paper reports on these issues, using the Technology Achievement Index as an illustration.
JRC Institute:Institute for the Protection and Security of the Citizen

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