Social Indicators Research

, Volume 126, Issue 1, pp 1–19 | Cite as

An Iterative Multivariate Post Hoc I-Distance Approach in Evaluating OECD Better Life Index

  • M. MarkovićEmail author
  • S. Zdravković
  • M. Mitrović
  • A. Radojičić


With the growing interest in evaluation of quality of life, emerging number of methods are presented. Each contribution varies depending on the matter of interest, and all of them address the issue of subjective weighting factors. The objective of this paper is to explore possibilities to enhance Better Life ranking methodology, available from the Better Life initiative website, using I-distance method. The result was twofold: firstly, we pointed out potential shortcomings of subjectively chosen weights of Better Life ranking methodology by employing our I-distance approach. Secondly, we provided detailed information on how each Better Life indicator contributes to the final position and emphasize the essential indicators in the process of ranking. We have collected the latest available data for 2014, including all 24 indicators of the Better Life composite index. After that we have compared the two ways of rankings, i.e. the I-distance ranking and the Better Life ranking, emphasizing the improvement offered by the I-distance methodology. Further, through iterative exclusion of indicators based on the level of their significance, we have reached the highest quality of the model. That model includes the following six indicators: personal earnings, water quality, life satisfaction, household net adjusted disposable income, employment rate, rooms per person. Hereby, we have compared and presented ranking changes at each iteration for the top 10 countries, which offer a level of consistency in their rank. In addition, one of the objectives is to help policymakers focus on the key indicators in order to improve the ranking of the country, showing governments and administrations which indicators are the most important to invest into. Moreover, our approach could be the foundation for impartial framework of the quality of life’s assessment, independent of subjectively formed weighting factors.


Composite index Better Life Index I-distance method Ranking of countries OECD countries 


  1. Abelson, P., Joyeux, R., Milunovich, G., & Chung, D. (2005). Explaining house prices in Australia: 1970–2003. Economic Record, 81(S1), 96–103. doi: 10.1111/j.1475-4932.2005.00243.x.CrossRefGoogle Scholar
  2. Arndt, S., Acion, L., Caspers, K., & Blood, P. (2013). How reliable are county and regional health rankings? Prevention Science, 14(5), 497–502. doi: 10.1007/s11121-012-0320-3.CrossRefGoogle Scholar
  3. Banting, K., Sharpe, A., & St-Hilaire, F. (2001). The review of economic performance and social progress: The longest decade: Canada in the 1990s. Montreal: The Institute for Research on Public Policy.Google Scholar
  4. Barro, R. J., & Lee, J. W. (2013). A new data set of educational attainment in the world, 1950–2010. Journal of Development Economics, 104, 184–198. doi: 10.3386/w15902.CrossRefGoogle Scholar
  5. Beça, P., & Santos, R. (2010). Measuring sustainable welfare: A new approach to the ISEW. Ecological Economics, 69(4), 810–819. doi: 10.1016/j.ecolecon.2009.11.031.CrossRefGoogle Scholar
  6. BLI (2014). OECD Better Life Index. Accessed October 10, 2014.
  7. Borini, R. (2012). Well-being and GDP: Why we need them both [Web log post]. Retrieved from
  8. Bravo, G. (2014). The Human Sustainable Development Index: New calculations and a first critical analysis. Ecological Indicators, 37(A), 145–150. doi: 10.1016/j.ecolind.2013.10.020.CrossRefGoogle Scholar
  9. Bruggemann, R., & Patil, G. P. (2011). Ranking and prioritization for multi-indicator systems: Introduction to partial order applications. Environmental and ecological statistics, 5. New York: Springer. doi: 10.1007/978-1-4419-8477-7.CrossRefGoogle Scholar
  10. Cameron, A. J., Van Stralen, M. M., Kunst, A. E., Te Velde, S. J., Van Lenthe, F. J., Salmon, J. O., & Brug, J. (2013). Microenvironmental factors including GDP per capita and physical activity in Europe. Medicine and Science in Sports and Exercise, 45(2), 278–285. doi: 10.1249/MSS.0b013e31826e69f0.CrossRefGoogle Scholar
  11. Caminada, K., Goudswaard, K., & Van Vliet, O. (2010). Patterns of welfare state indicators in the EU: Is there convergence? Journal of Common Market Studies, 48(3), 529–556. doi: 10.1111/j.1468-5965.2010.02063.x.CrossRefGoogle Scholar
  12. Campisi, D., De Nicola, A., Farhadi, M., & Mancuso, P. (2013). Discovering the impact of ICT, FDI and human capital on GDP: A cross-sectional analysis. International Journal of Engineering Business Management, 5, 46. doi: 10.5772/56922.Google Scholar
  13. Cherchye, L., Moesen, W., Rogge, N., & Van Puyenbroeck, T. (2007). An Introduction to ‘benefit of the doubt’ Composite index. Social Indicators Research, 82(1), 111–145. doi: 10.1007/s11205-006-9029-7.CrossRefGoogle Scholar
  14. Clark, A., & Postel-Vinay, F. (2009). Job security and job protection. Oxford Economic Papers, 61(2), 207–239. doi: 10.1093/oep/gpn017.CrossRefGoogle Scholar
  15. Cohen, S. (2004). Social relationships and health. American Psychologist, 59(8), 676–684. doi: 10.1037/0003-066X.59.8.676.CrossRefGoogle Scholar
  16. Costanza, R., Kubiszewski, I., Giovannini, E., Lovins, H., McGlade, J., Pickett, K. E., et al. (2014). Time to leave GDP behind. Nature, 505(7483), 283–285. doi: 10.1038/505283a.CrossRefGoogle Scholar
  17. Coyle, D., Stieb, D., Burnett, R. T., DeCivita, P., Krewski, D., Chen, Y., & Thun, M. J. (2003). Impact of particulate air pollution on quality-adjusted life expectancy in Canada. Journal of Toxicology and Environmental Health, Part A, 66(16–19), 1847–1864. doi: 10.1080/15287390306447.CrossRefGoogle Scholar
  18. Crompton, S., Roy, R., & Caird, S. (2002). Household ecological footprinting for active distance learning and challenge of personal lifestyles. International Journal of Sustainability in Higher Education, 3(4), 313–323. doi: 10.1108/14676370210442355.CrossRefGoogle Scholar
  19. Diener, E., Lucas, R.E., & Oishi, S. (2009). Subjective well-being: The science of happiness and life satisfaction. In C. R. Snyder & S. J. Lopez (Eds.), Handbook of positive psychology (2nd ed., pp. 63–73). New York: Oxford University Press. doi: 10.1093/oxfordhb/9780195187243.013.0017.
  20. Diener, E., & Suh, E. (1997). Measuring quality of life: economic, social, and subjective indicators. Social Indicators Research, 40(1–2), 189–216. doi: 10.1023/A:1006859511756.CrossRefGoogle Scholar
  21. Dobbie, M. J., & Dail, D. (2012). Robustness and sensitivity of weighting and aggregation in constructing composite indices. Ecological Indicators, 29, 270–277. doi: 10.1016/j.ecolind.2012.12.025.CrossRefGoogle Scholar
  22. Dobrota, M., Bulajic, M., Bornmann, L., & Jeremic, V. (2015). A new approach to QS university ranking using composite I-distance indicator: Uncertainty and sensitivity analyses. Journal of the Association for Information Science and Technology,. doi: 10.1002/asi.23355.Google Scholar
  23. Dobrota, M., Jeremic, V., & Markovic, A. (2012). A new perspective on the ICT Development Index. Information Development, 28(4), 271–280. doi: 10.1177/0266666912446497.CrossRefGoogle Scholar
  24. Dolan, P., Peasgood, T., & White, M. (2008). Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being. Journal of Economic Psychology, 29(1), 94–122. doi: 10.1016/j.joep.2007.09.001.CrossRefGoogle Scholar
  25. Epland, J., & Kirkeberg, I.M. (2012). Wealth distribution in Norway: evidence from a new register-based data source, resource document. Statistics Norway. Accessed October 16, 2014.
  26. Eurostat (2014). In statistics explained, Eurostat European Commission. Accessed October 15, 2014.
  27. Fuchs, V. R. (2013). The gross domestic product and health care spending. The New England Journal of Medicine, 369(2), 107–109. doi: 10.1056/NEJMp1305298.CrossRefGoogle Scholar
  28. Garcia, E. C., & Martin, J. A. R. (2010). Measurement of disparities between indicators associated with the welfare in least developed countries (LDCs) of Asia. Revista de Economia Mundial, 25, 83–108.Google Scholar
  29. Gerfin, M., & Lechner, M. (2002). A microeconometric evaluation of the active labour market policy in Switzerland. The Economic Journal, 112(482), 854–893. doi: 10.1111/1468-0297.00072.CrossRefGoogle Scholar
  30. Graham, C., & Crown, S. (2014). Religion and well-being around the world: social purpose, social time, or social insurance? International Journal of Wellbeing, 4(1), 1–27. doi: 10.5502/ijw.v4i1.1.CrossRefGoogle Scholar
  31. Guttorp, P., & Kim, T. Y. (2013). Uncertainty in ranking the hottest years of US surface temperatures. Journal of Climate, 26(17), 6323–6328. doi: 10.1175/JCLI-D-12-00760.1.CrossRefGoogle Scholar
  32. Hartman, M., Martin, A. B., Benson, J., & Catlin, A. (2013). National health spending in 2011: Overall growth remains low, but some payers and services show signs of acceleration. Health Affairs, 32(1), 87–99. doi: 10.1377/hlthaff.2012.1206.CrossRefGoogle Scholar
  33. Headey, B., Marks, G., & Wooden, M. (2005). The structure and distribution of household wealth in Australia. Australian Economic Review, 38(2), 159–175. doi: 10.1111/j.1467-8462.2005.00363.x.CrossRefGoogle Scholar
  34. Income. (2014). In Topics, OECD Better Life Index. Retrieved from
  35. Income inequality (2011). The rise of income inequality amongst rich countries. Accessed October 9, 2014.
  36. Ivanovic, B. (1977). Classification theory. Belgrade: Institute for Industrial Economic.Google Scholar
  37. Jeremic, V., Bulajic, M., Martic, M., Markovic, A., Savic, G., Jeremic, D., & Radojicic, Z. (2012). An evaluation of European countries’ health systems through distance based analysis. Hippokratia, 16(2), 175–179.Google Scholar
  38. Jeremic, V., Bulajic, M., Martic, M., & Radojicic, Z. (2011). A fresh approach to evaluating the academic ranking of world universities. Scientometrics, 87(3), 587–596. doi: 10.1007/s11192-011-0361-6.CrossRefGoogle Scholar
  39. Jeremic, V., & Jovanović-Milenkovic, M. (2014). Evaluation of Asian university rankings: Position and perspective of leading Indian higher education institutions. Current Science, 106(12), 1647–1653.Google Scholar
  40. Jeremic, V., Jovanovic-Milenkovic, M., Radojicic, Z., & Martic, M. (2013). Excellence with leadership: the crown indicator of SCImago institutions rankings IBER report. El profesional de la información, 22(5), 474–480. doi: 10.3145/epi.2013.sep.13.CrossRefGoogle Scholar
  41. Jovanovic, M., Jeremic, V., Savic, G., Bulajic, M., & Martic, M. (2012). How does the normalization of data affect the ARWU ranking? Scientometrics, 93(2), 319–327. doi: 10.1007/s11192-012-0674-0.CrossRefGoogle Scholar
  42. Karavoltsos, S., Sakellari, A., Mihopoulos, N., Dassenakis, M., & Scoullos, M. J. (2008). Evaluation of the quality of drinking water in regions of Greece. Desalination, 224(1), 317–329. doi: 10.1016/j.desal.2007.06.013.CrossRefGoogle Scholar
  43. Lago-Peñas, S., Cantarero-Prieto, D., & Blázquez-Fernández, C. (2013). On the relationship between GDP and health care expenditure: A new look. Economic Modelling, 32, 124–129. doi: 10.1016/j.econmod.2013.01.021.CrossRefGoogle Scholar
  44. Leetmaa, P., Rennie, H., & Thiry, B. (2009). Household saving rate higher in the EU than in the USA despite lower income. Resource document. Eurostat. Accessed December 6, 2014.
  45. Leigh, A. (2014). Poverty and inequality worsening in Australia [Web log post]. Retrieved from
  46. Mendola, D., Scuderi, R., & Lacagnina, V. (2013). Defining and measuring the development of a country over time: A proposal of a new index. Quality & Quantity, 47(5), 2473–2494. doi: 10.1007/s11135-012-9665-8.CrossRefGoogle Scholar
  47. Mizobuchi, H. (2014). Measuring world better life frontier: A Composite index for OECD Better Life Index. Social Indicators Research, 118(3), 987–1007. doi: 10.1007/s11205-013-0457-x.CrossRefGoogle Scholar
  48. Moffatt, I. (2000). Ecological footprints and sustainable development. Ecological Economics, 32(3), 359–362. doi: 10.1016/S0921-8009(99)00154-8.CrossRefGoogle Scholar
  49. Morrell, S., Taylor, R., Quine, S., & Kerr, C. (1993). Suicide and unemployment in Australia 1907–1990. Social Science and Medicine, 36(6), 749–756.CrossRefGoogle Scholar
  50. Morrow, W. (2014). Australian unemployment rate rises to the highest level in 12 years. [Web log post]. Retrieved from
  51. Narayan, K., & Smyth, R. (2004). Crime rates, male youth unemployment and real income in Australia: Evidence from Granger causality tests. Applied Economics, 36(18), 2079–2095. doi: 10.1080/0003684042000261842.CrossRefGoogle Scholar
  52. Nelson, K. (2013). Social assistance and EU poverty thresholds 1990–2008. Are European welfare systems providing just and fair protection against low income? European Sociological Review, 29(2), 386–401. doi: 10.1093/esr/jcr080.CrossRefGoogle Scholar
  53. OECD. (2012). Water quality and agriculture: Meeting the policy change. OECD Studies on Water, OECD Publishing.,. doi: 10.1787/9789264168060-en.CrossRefGoogle Scholar
  54. OECD. (2013). Framework for statistics on the distribution of household income, consumption and wealth. OECD Publishing,. doi: 10.1787/9789264194830-en.Google Scholar
  55. OECD. (2014). Society at a Glance 2014: OECD Social indicators. OECD Publishing,. doi: 10.1787/soc_glance-2014-en.Google Scholar
  56. Oeppen, J., & Vaupel, J. W. (2002). Broken limits to life expectancy. Science, 296(5570), 1029–1031. doi: 10.1126/science.1069675.CrossRefGoogle Scholar
  57. Osberg, L., & Sharpe, A. (2002). An Index of Economic Well-Being for Selected OECD countries. Review of Income and Wealth, 48(3), 291–316. doi: 10.1111/1475-4991.00056.CrossRefGoogle Scholar
  58. Paruolo, P., Saisana, M., & Saltelli, A. (2012). Ratings and rankings: Voodoo or science? Journal of the Royal Statistical Society: Series A (Statistics in Society), 176(3), 609–634. doi: 10.1111/j.1467-985X.2012.01059.x.CrossRefGoogle Scholar
  59. Petrosillo, I., Costanza, R., Aretano, R., Zaccarelli, N., & Zurlini, G. (2013). The use of subjective indicators to assess how natural and social capital support residents’ quality of life in a small volcanic island. Ecological Indicators, 24, 609–620. doi: 10.1016/j.ecolind.2012.08.021.CrossRefGoogle Scholar
  60. Piazzesi, M., Schneider, M., & Tuzel, S. (2007). Housing, consumption, and asset pricing. Journal of Financial Economics, 83(3), 531–569. doi: 10.1016/j.jfineco.2006.01.006.CrossRefGoogle Scholar
  61. Pissourios, I. A. (2013). An interdisciplinary study on indicators: A comparative review of quality-of-life, macroeconomic, environmental, welfare and sustainability indicators. Ecological Indicators, 34, 420–427. doi: 10.1016/j.ecolind.2013.06.008.CrossRefGoogle Scholar
  62. Plunkett, J. (2011). Growth without Gain? The faltering living standards of people on low-to-middle incomes. Resource document. Resolution Foundation. Accessed December 5, 2014.
  63. Pratt, T. C., & Godsey, T. W. (2003). Social support, inequality, and homicide: A cross-national test of an integrated theoretical model. Criminology, 41(3), 611–644.CrossRefGoogle Scholar
  64. Radojicic, Z., Isljamovic, S., Petrovic, N., & Jeremic, V. (2012). A novel approach to evaluating sustainable development. Problemy Ekorozwoju: studia filozoficzno-sozologiczne, 7(1), 81–85.Google Scholar
  65. Radojicic, Z., & Jeremic, V. (2012). Quantity or quality: What matters more in ranking higher education institutions. Current Science, 103(2), 158–162.Google Scholar
  66. Reiakvam, L.K., & Solheim, H. (2013). Comparison of household debt relative to income across four Nordic countries. Resource document. Norway Bank. Accessed December 11, 2014.
  67. Saisana, M., & D’Hombres, B. (2008). Higher education rankings: Robustness issues and critical assessment. How much confidence can we have in Higher Education Rankings? EUR23487, Joint Research Centre, Publications Office of the European Union, Italy. doi: 10.2788/92295.
  68. Saisana, M., d’Hombres, B., & Saltelli, A. (2011). Rickety numbers: Volatility of university rankings and policy implications. Research Policy, 40(1), 165–177. doi: 10.1016/j.respol.2010.09.003.CrossRefGoogle Scholar
  69. Saisana, M., & Tarantola, S. (2002). State-of-the-art report on current methodologies and practices for composite index development. EUR 20408 EN, European Commission-JRC: Italy.Google Scholar
  70. Saltelli, A. (2007). Composite index between analysis and advocacy. Social Indicators Research, 81(1), 65–77. doi: 10.1007/s11205-006-0024-9.CrossRefGoogle Scholar
  71. Saul, D. (2014). Australia: Deaths of young homeless couple highlight social crisis [Web log post]. Retrieved from
  72. Seke, K., Petrovic, N., Jeremic, V., Vukmirovic, J., Kilibarda, B., & Martic, M. (2013). Sustainable development and public health: rating European countries. BMC Public Health, 13(1), 77. doi: 10.1186/1471-2458-13-77.CrossRefGoogle Scholar
  73. Sharma, A., & Srivastava, P. (2011). Does disaggregation affect the relationship between health care expenditure and GDP? An analysis using regime shifts. Australian Economic Papers, 50(1), 27–39. doi: 10.1111/j.1467-8454.2011.00409.x.CrossRefGoogle Scholar
  74. Sharpe, A., & Smith, J. (2005). Measuring the Impact of Research on Well-being: A Survey of Indicators of Well-being. CSLS Research Reports (No. 2005-02). Centre for the Study of Living Standards.Google Scholar
  75. Siebert, H. (1997). Labor market rigidities: at the root of unemployment in Europe. The Journal of Economic Perspectives, 11(3), 37–54. doi: 10.1257/jep.11.3.37.CrossRefGoogle Scholar
  76. Smeeding, T. M., Saunders, P., Coder, J., Jenkins, S., Fritzell, J., Hagenaars, A. J., et al. (1993). Poverty, inequality, and family living standards impacts across seven nations: The effect of noncash subsidies for health, education, and housing. Review of Income and Wealth, 39(3), 229–256. doi: 10.1111/j.1475-4991.1993.tb00458.x.CrossRefGoogle Scholar
  77. Soo, K. T. (2013). Does anyone use information from university rankings? Education Economics, 21(2), 176–190. doi: 10.1080/09645292.2011.561626.CrossRefGoogle Scholar
  78. Stansfeld, S. A. (2006). Social support and social cohesion. Social Determinants of Health, 2, 148–171.Google Scholar
  79. Switzerland. (2014). At OECD Better Life Index website. Retrieved from
  80. Tarantola, S., & Saltelli, A. (2007). Composite index: the art of mixing apples and oranges. Resource document. Joint Research Centre. Accessed November 12, 2014.
  81. Tessier, S., Vuillemin, A., Bertrais, S., Boini, S., Le Bihan, E., Oppert, J. M., et al. (2007). Association between leisure-time physical activity and health-related quality of life changes over time. Preventive Medicine, 44(3), 202–208. doi: 10.1016/j.ypmed.2006.11.012.CrossRefGoogle Scholar
  82. The World Bank (2012). World Development Indicators. Unemployment, total [Data file]. Retrieved from
  83. UNDP (2004). Human development report. Resource document. United Nations Development Program. Accessed October 18, 2014.
  84. Veenhoven, R. (2012). Cross-national differences in happiness: Cultural measurement bias or effect of culture? International Journal of Wellbeing, 2(4), 333–353. doi: 10.5502/ijw.v2.i4.4.CrossRefGoogle Scholar
  85. Well-being. (2011). Well-being and wealth: The pursuit of happiness. The Economist. Retrieved from
  86. Willett, M. (2013). The 15 countries with the highest quality of life. [Web log post]. Retrieved from

Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  • M. Marković
    • 1
    Email author
  • S. Zdravković
    • 2
  • M. Mitrović
    • 1
  • A. Radojičić
    • 1
  1. 1.Faculty of Organizational SciencesUniversity of BelgradeBelgradeSerbia
  2. 2.Faculty of Transport and Traffic EngineeringUniversity of BelgradeBelgradeSerbia

Personalised recommendations