A Maximum Entropy Perspective of Pena’s Synthetic Indicators
9 Pages Posted: 2 Apr 2012 Last revised: 3 Apr 2012
Date Written: April 1, 2012
This paper uses mixed combinatorial-cum-real particle swarm method to obtain a heuristically optimal order in which the constituent variables can be arranged so as to yield some generalized maximum entropy synthetic indicators that represent the constituent variables in the best information-theoretic sense. It may help resolve the arbitrariness and indeterminacy of Pena’s method of construction of a synthetic indicator which at present is very sensitive to the order in which the constituent variables (whose linear aggregation yields the synthetic indicator) are arranged.
Keywords: Synthetic indicators, Composite indices, Pena’s distance, Mixed Combinatorial Particle swarm, Sharma-Mittal entropy, Rényi entropy, Tsallis entropy. Kaniadakis entropy, Abe entropy
JEL Classification: C18, C43, C44, C61
Suggested Citation: Suggested Citation