Constructing a Knowledge Economy Composite Indicator with Imprecise Data
24 Pages Posted: 28 Aug 2009
Date Written: July 2009
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: Suggested Citation