The Imprecision of Logistics Performance Index Rankings

Abstract

The purpose of this study is to analyze the precision of the rankings based on the World Bank’s widely used Logistics Performance Index (LPI). Although uncertainty in LPI rankings is acknowledged by the developers of the LPI, we use a recently developed methodology to show that the statistical precision of the rankings—the extent to which rankings provide meaningful separation between countries—is very low, rendering LPI ranking less useful for logistics policies. We call for a more critical assessment of the experts’ responses underlying the LPI to improve the relevance and precision of LPI rankings.

Keywords: Logistics, Rankings, Rank Precision, World Bank

JEL Classification: F00, N70, O57