Journal of the Operational Research Society

, Volume 59, Issue 2, pp 239–251

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

  • L Cherchye
  • W Moesen
  • N Rogge
  • T Van Puyenbroeck
  • M Saisana
  • A Saltelli
  • R Liska
  • S Tarantola
Paper

DOI: 10.1057/palgrave.jors.2602445

Cite this article as:
Cherchye, L., Moesen, W., Rogge, N. et al. J Oper Res Soc (2008) 59: 239. doi:10.1057/palgrave.jors.2602445

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 Analysiscomposite indicator constructionrobustness analysis

Copyright information

© Palgrave Macmillan Ltd 2007

Authors and Affiliations

  • L Cherchye
    • 1
  • W Moesen
    • 1
  • N Rogge
    • 1
  • T Van Puyenbroeck
    • 1
  • M Saisana
    • 2
  • A Saltelli
    • 2
  • R Liska
    • 2
  • S Tarantola
    • 2
  1. 1.Catholic University of LeuvenBelgium
  2. 2.Joint Research Centre, European CommissionItaly