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A Novel Two-Phase Approach to Computing a Regional Social Progress Index
Abstract
In recent decades, concerns have emerged regarding the fact that standard macro-economic statistics (such as gross domestic product) do not provide a sufficiently detailed and accu- rate picture of societal progress and wellbeing and of people’s true quality of life. This has further translated into concerns regarding the design of related public policies and whether these actually have the intended impact in practice. One of the first steps in bridging the gap between wellbeing metrics and policy intervention is the developement of improved wellbeing measures. The calculation of a regional Social Progress Index (SPI) has been on the policymakers’ agenda for quite some time, as it is used to assist in the proposal of strategies that would create the conditions for all individuals in a society to reach their full potential, enhancing and sustaining the quality of their lives, while reducing regional inequalities. In this manuscript, we show a novel way to calculate a regional SPI under a two-phase approach. In the first phase, we aggregate the item-level information into sub-factor-level indices and the sub-factor-level indices into a factor-level index using an Objective General Index (OGI); in the second phase, we use the factor-level indices to obtain the regional SPI through a pure data envelopment analysis (DEA) approach. We further apply the method developed to analyse a single period of social progress in Peru. The manuscript is a contribution to the practical measurement of social progress.
As risks of all sorts, from economic and financial crises to terrorism acts and pandemics, keep on characterising and affecting all aspects of life globally, at the individual and societal level, national and international organisations, as well as governments, need to be constantly adapting and collaborating through international diplomacy to pursue common goals for people’s well-being. This is where the topic of composite indices comes up. Composite indices are used by national and international organisations, and governments and businesses alike, to monitor different performance aspects of the economy of a country and the people therein; and they have historically been valuable as communication tools and as inputs into decision and policymaking. In this work, we delve into the relevant literature to explore the link between international diplomacy, institutions, and composite indices, with the aim to highlight the usefulness of composite indices in practice. We conclude with final thoughts and recommendations for future research on the topic.
Social progress and well-being throughout the world has arrived at a critical turning point. Following decades of social losses among the world’s poorest developing countries of Africa, Asia and Latin America, the majority of these and other nations now are experiencing significant social gains. Using the Weighted Index of Social Progress (WISP18), the author traces the net social gains and social losses experienced by most the world’s nations over a 50-year time, ranging from 1970 to the present. The data reported draw on the author’s extensive data base of historical and contemporary social indicators and links the current study to his and other reports of social progress and well-being that have been published this period. Data are reported at four levels of analysis, i.e., that of the world-as-a-whole, regional (continental) data, subregional data using the preceding and, finally, for selected countries for which the changes have been most remarkable. The net social gains on the WISP18 and earlier version of the WISP portray very positive outcomes for the 162 countries included in the study (representing 95% of the world’s total population) for both the near- and long-term.
In this paper, we propose a method to measure competitiveness performance at the subnational level, with an application to Peruvian regions. For this, we propose a benefit-of-the-doubt composite index that summarizes the information of several indicators that characterize competitiveness. It is based on an optimization approach, using Data Enveloping Analysis (DEA) techniques, so that each indicator is weighted in an endogenous way, and each unit is evaluated in the most favourable light. Our proposed index is a non-radial variant of the typical DEA scores, which avoids the traditional pitfalls of DEA-based composite indexes, such as unreasonable weights. Additionally, we propose a meta-frontier approach in order to compare the competitiveness performances across different periods of evaluation. Our assessments of the Peruvian regions’ competitiveness performance improve on the results of traditional DEA methods, which award high marks to regions with very heterogeneous performance (i.e., regions with very high scores in some indicators, and very poor in others). Additionally, the comparison of the performance across time shows a general decrease in the average competitiveness between 2008 to 2014 in the Peruvian regions.
Four replicable findings have emerged regardingthe relation between income and subjectivewell-being (SWB): 1. There are largecorrelations between the wealth of nations andthe mean reports of SWB in them, 2. There aremostly small correlations between income andSWB within nations, although these correlationsappear to be larger in poor nations, and therisk of unhappiness is much higher for poorpeople, 3. Economic growth in the last decadesin most economically developed societies hasbeen accompanied by little rise in SWB, andincreases in individual income lead to variableoutcomes, and 4. People who prize materialgoals more than other values tend to besubstantially less happy, unless they are rich.Thus, more money may enhance SWB when it meansavoiding poverty and living in a developednation, but income appears to increase SWBlittle over the long-term when more of it isgained by well-off individuals whose materialdesires rise with their incomes. Several majortheories are compatible with most existingfindings: A. The idea that income enhances SWBonly insofar as it helps people meet theirbasic needs, and B. The idea that the relationbetween income and SWB depends on the amount ofmaterial desires that people's income allowsthem to fulfill. We argue that the firstexplanation is a special case of the secondone. A third explanation is relativelyunresearched, the idea that societal norms forproduction and consumption are essential tounderstanding the SWB-income interface. Inaddition, it appears high SWB might increasepeople's chances for high income. We review theopen issues relating income to SWB, anddescribe the research methods needed to provideimproved data that will better illuminate thepsychological processes relating money to SWB.
The question of what constitutes the good life has been pondered for millennia. Yet only in the last decades has the study of well-being become a scientific endeavor. This book is based on the idea that we can empirically study quality of life and make cross-society comparisons of subjective well-being (SWB).
A potential problem in studying SWB across societies is that of cultural relativism: if societies have different values, the members of those societies will use different criteria in evaluating the success of their society. By examining, however, such aspects of SWB as whether people believe they are living correctly, whether they enjoy their lives, and whether others important to them believe they are living well, SWB can represent the degree to which people in a society are achieving the values they hold dear.
The contributors analyze SWB in relation to money, age, gender, democracy, and other factors. Among the interesting findings is that although wealthy nations are on average happier than poor ones, people do not get happier as a wealthy nation grows wealthier.
Bradford Books imprint
Mismeasuring Our Lives is the result of this major intellectual effort, containing pressing relevance for anonyme engaged in assessing how and whether our economy is serving the needs of our society. The authors offer a sweeping assessment of GDP's limitations as a measurement of the well-being of societies and introduce a bold array of new concepts from sustainable measures of economic welfare to evaluations of savings and wealth and a "green GDP". At a time when policy makers worldwide are grappling with unprecedented global financial and environmemntal issues. Mismeasuring Our Lives is an essential guide to measuring the things that matter most.
Purpose
Regional competitiveness refers to the capacity of a region to manage its resources and competencies to increase the well-being of its people. Measuring regional competitiveness is, thus, a major consideration for policymakers, businesses and the academic community in their endeavour to improve the same. This paper aims to demonstrate a novel way to calculate the regional competitiveness index under a two-stage objective general index (OGI) framework.
Design/methodology/approach
The authors compute the regional competitiveness index under a two-stage OGI framework. In the first stage, they aggregate the sub-factor level information into a factor level index; in the second stage, they use the factor level index to obtain a regional competitiveness index.
Findings
The authors discuss the properties of the proposed index in detail. They further analyse five periods of regional competitiveness of Peru spanning the period 2008-2015. Among others, the results reveal the existence of the resource curse of the mining regions of Peru.
Practical implications
The paper is a contribution to the practical measurement of competitiveness.
Social implications
The calculation of a regional competitiveness index is vital for improving the competitiveness of the countries and for reducing regional inequalities.
Originality/value
When compared to the existent methods available in the literature, the advantage of the proposed method resides in the fact that the derived index has a positive correlation with the factor-level indices and the factor-level indices have a positive correlation with the sub-factor-level information.
Multivariate quantitative data are often summarized into a general index as a weighted sum when the variates have a prescribed order. Although the sum of standardized scores is a sensible choice of index, it may have negative correlation with some of the variates. In this paper, a general index that has positive correlation with all the variates is constructed. The index is applied to study the fairness of decathlon scoring. Quantification of ordered categorical data is also discussed. The limit of quantification characterizes the Gaussian distribution.
The twenty-first century has seen a further dramatic increase in the use of quantitative knowledge for governing social life after its explosion in the 1980s. Indicators and rankings play an increasing role in the way governmental and non-governmental organizations distribute attention, make decisions, and allocate scarce resources. Quantitative knowledge promises to be more objective and straightforward as well as more transparent and open for public debate than qualitative knowledge, thus producing more democratic decision-making. However, we know little about the social processes through which this knowledge is constituted nor its effects. Understanding how such numeric knowledge is produced and used is increasingly important as proliferating technologies of quantification alter modes of knowing in subtle and often unrecognized ways. This book explores the implications of the global multiplication of indicators as a specific technology of numeric knowledge production used in governance.
It is well known that competitiveness has a positive effect on long-term economic growth. Concerned, thus, with creating and maintaining an environment that sustains more value creation for its enterprises and more prosperity for its people, the goal of this research paper is to assist the Peruvian national and regional policy makers, business, and academic community in their endeavor to improve regional and national competitiveness by means of developing a methodology based on Data Envelopment Analysis (DEA) to measure and rank the competitiveness of all the regions of Peru. It is important to highlight that DEA is a method that has never been used before in the calculation of regional competitiveness and this research paper is the first of its kind in Peru to adapt this method to develop a regional competitiveness index. Results revealed that coastal regions are highly competitive when compared to the mountains and jungle regions. Because of the large differences in the competitiveness of the regions of Peru, the research results point out to the need for a unified approach in creating a development strategy and improving the competitiveness of all the regions of Peru.
IfA is ann n matrix with strictly positive elements, then according to a theorem ofSinkhorn, there exist diagonal matricesD
1 andD
2 with strictly positive diagonal elements such thatD
1
A D
2 is doubly stochastic. This note offers an alternative proof of a generalization due toBrualdi, Parter andScheider, and independently toSinkhorn andKnopp, who show that A need not be strictly positive, but only fully indecomposable. In addition, we show that the same scaling is possible (withD
1 =D
2) whenA is strictly copositive, and also discuss related scaling for rectangular matrices. The proofs given show thatD
1 andD
2 can be obtained as the solution of an appropriate extremal problem.The scaled matrixD
1
A D
2 is of interest in connection with the problem of estimating the transition matrix of a Markov chain which is known to be doubly stochastic. The scaling may also be of interest as an aid in numerical computations.
A nonlinear (nonconvex) programming model provides a new definition of efficiency for use in evaluating activities of not-for-profit entities participating in public programs. A scalar measure of the efficiency of each participating unit is thereby provided, along with methods for objectively determining weights by reference to the observational data for the multiple outputs and multiple inputs that characterize such programs. Equivalences are established to ordinary linear programming models for effecting computations. The duals to these linear programming models provide a new way for estimating extremal relations from observational data. Connections between engineering and economic approaches to efficiency are delineated along with new interpretations and ways of using them in evaluating and controlling managerial behavior in public programs.
In this essay, we summarize the main features of Yunus' economic thought and discuss whether it is possible to conclude, as seems straightforward according to Yunus (1997), that microfinance is good for the poor and that it exemplifies a typical activity of social enterprise. To do this, we review some of the contents of the 2006 World Bank/Brookings Institution conference on microfinance as summarized by Barr et al. (2007). Copyright 2008 The Author Journal compilation 2008 Banca Monte dei Paschi di Siena SpA.
If GDP is up why is America down?
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Mining cluster development in Peru: Learning from the International Best Practice
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