
doi: 10.2139/ssrn.2264748
handle: 10419/74813
Many aspects of social welfare are intrinsically multidimensional. Composite indices at-tempting to reduce this complexity to a unique measure abound in many areas of economics and public policy. Comparisons based on such measures depend, sometimes critically, on how the different dimensions of performance are weighted. Thus, a policy maker may wish to take into account imprecision over composite index weights in a systematic manner. In this paper, such weight imprecision is parameterized via the e-contamination framework of Bayesian statistics. Subsequently, combining results from polyhedral geometry, social choice, and theoretical computer science, an analytical procedure is presented that yields a provably robust ranking of the relevant alternatives in the presence of weight imprecision. The main idea is to consider a vector of weights as a voter and a continuum of weights as an electorate. The procedure is illustrated on recent versions of the Rule of Law and Human Development indices.
Composite Index, ddc:330, Multidimensional Welfare, Social Choice, Multidimensional Welfare, Composite Index, e-Contamination, Polyhedral Geometry, Social Choice, Approximation Algorithms, C61, D71, C02, I31, D04, ε-contamination, Polyhedral Geometry, Approximation Algorithms, jel: jel:C61, jel: jel:D71, jel: jel:C02, jel: jel:D04, jel: jel:I31
Composite Index, ddc:330, Multidimensional Welfare, Social Choice, Multidimensional Welfare, Composite Index, e-Contamination, Polyhedral Geometry, Social Choice, Approximation Algorithms, C61, D71, C02, I31, D04, ε-contamination, Polyhedral Geometry, Approximation Algorithms, jel: jel:C61, jel: jel:D71, jel: jel:C02, jel: jel:D04, jel: jel:I31
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