Building Weighted-Domain Composite Indices of Life Satisfaction with Data Envelopment Analysis
The specialised literature has frequently addressed the relationship between life domains and people’s satisfaction with life. Some researchers have posed questions regarding the importance of domains, therefore interpreting them as weightings and creating domain satisfaction indices. This paper illustrates how Data Envelopment Analysis (DEA) and Multi-Criteria-Decision-Making (MCDM) techniques can be employed to compute domain-based composite indices of life satisfaction and weightings for life domains. Furthermore, an empirical application is performed on a sample of 178 people living in a rural community in Yucatan (Mexico). One of the main features of the aforementioned techniques is that weightings might differ from one individual to another. Accordingly, several weighting schemes are used to compute different life satisfaction indices, in addition to a constant equally-weighted index. Based on the goodness-of-fit criteria commonly used in this literature, our main result is that DEA-MCDM indicators of life satisfaction do not improve the relationship with self-reported life satisfaction in comparison to the equally-weighted index.
KeywordsData Envelopment Analysis Domains of life Life satisfaction indices Multi-Criteria-Decision-Making Weightings
The authors gratefully acknowledge the comments and suggestions made by an anonymous referee and also the financial support from the Spanish Ministry of Economy and Competitiveness (projects ECO2011-30260-C03-01 and ECO2012-32189) and the Generalitat Valenciana (program PROMETEO 2009/098).
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