An Iterative Multivariate Post Hoc I-Distance Approach in Evaluating OECD Better Life Index
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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.
KeywordsComposite index Better Life Index I-distance method Ranking of countries OECD countries
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