A sequential benefit-of-the-doubt composite indicator

Benefit-of-the doubt; Composite indicator; Data envelopment analysis; Notre Dame Environmental Change Initiative; Sequential; Best practices; Composite indicators; Environmental change; Normalisation; Notre dame environmental change initiative; Panel data; Performance; Relative weights; Computer Science (all); Modeling and Simulation; Management Science and Operations Research; Information Systems and Management; General Computer Science; Industrial and Manufacturing Engineering

Abstract :

[en] In many contexts, performances are measured by aggregating indicators. To do so, practitioners have to choose how to normalize and weight the selected indicators. A popular method is the benefit-of-the-doubt (BoD) which constructs composite indicators based on relative weights and avoids normalization. When dealing with panel data, the BoD computes composite indicators using contemporaneous data only. A consequence is that composite indicators are over-estimated because the accumulation of best practices is ignored. Inspired by the production economics literature, we suggest new sequential composite indicators keeping the BoD spirit. These indicators are not based on contemporaneous data but include current and past information. By comparing the two approaches, we define the new concept of knowledge accumulation ratio. We use the sequential composite indicators to evaluate the vulnerability, readiness, and resilience to climate change of more than 180 countries over the 1995–2020 period. Our results highlight two main groups of countries: those with great need of new investments and an urgency for adaptation, and those well positioned but with some adaptation challenges.

Disciplines :

Production, distribution & supply chain management

Author, co-author :

Walheer, Barnabé ; Université de Liège - ULiège > HEC Liège : UER > UER Economie : Microéconométrie et économétrie appliquée

Language :

English

Title :

A sequential benefit-of-the-doubt composite indicator

Publication date :

2024

Journal title :

European Journal of Operational Research

ISSN :

0377-2217

eISSN :

1872-6860

Publisher :

Elsevier B.V.

Peer reviewed :

Peer Reviewed verified by ORBi

Additional URL :

https://api.elsevier.com/content/article/PII:S0377221724000481?httpAccept=text/xml

Funders :

F.R.S.-FNRS - Fonds de la Recherche Scientifique [BE]

Funding text :

We thank the Editor Michael Yearworth and the three referees for their comments that have improved the paper substantially. This work is supported by the Fonds de la Recherche Scientifique (FNRS) under Grant No. J.0193.23. .

Available on ORBi :

since 27 February 2024

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