Constructing a Knowledge Economy Composite Indicator with Imprecise Data

24 Pages Posted: 28 Aug 2009

See all articles by L. Cherchye

L. Cherchye

KU Leuven; Erasmus Research Institute of Management (ERIM)

Wim Moesen

KU Leuven - Faculty of Business and Economics (FEB)

N. Rogge

KU Leuven - Faculty of Business and Economics (FEB)

Tom Van Puyenbroeck

European Academy of Brussels

Date Written: July 2009

Abstract

This paper focuses on the construction of a composite indicator for the knowledge based economy using imprecise data. Specifically, for some indicators we only have information on the bounds of the interval within which the true value is believed to lie. The proposed approach is based on a recent offspring in the Data Envelopment Analysis literature. Given the setting of evaluating countries, this paper discerns a ‘strong country in weak environment’ and ‘weak country in strong environment’ scenario resulting in respectively an upper and lower bound on countries’ performance. Accordingly, we derive a classification of ‘benchmark countries’, ‘potential benchmark countries’, and ‘countries open to improvement’.

Keywords: knowledge economy indicators, composite indicators, Multiple Imputation, Benefit of the Doubt, weight restrictions, Data Envelopment Analysis, data impreciseness

JEL Classification: C14, C61, C82

Suggested Citation

Cherchye, Laurens and Moesen, Wim and Rogge, Nicky and Van Puyenbroeck, Tom, Constructing a Knowledge Economy Composite Indicator with Imprecise Data (July 2009). Available at SSRN: https://ssrn.com/abstract=1462660 or http://dx.doi.org/10.2139/ssrn.1462660

Laurens Cherchye

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant
Belgium

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Wim Moesen

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Nicky Rogge (Contact Author)

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Tom Van Puyenbroeck

European Academy of Brussels ( email )

1000 Brussels
Belgium

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