Index (statistics)

The ‘Report by the Commission on the Measurement of Economic Performance and Social Progress’, written by Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi in 2009 [3] suggests that these measures have experienced a dramatic growth in recent years due to three concurring factors: According to Earl Babbie, items in indices are usually weighted equally, unless there are some reasons against it (for example, if two items reflect essentially the same aspect of a variable, they could have a weight of 0.5 each).

First, items should be selected based on their content validity, unidimensionality, the degree of specificity in which a dimension is to be measured, and their amount of variance.

Items should be empirically related to one another, which leads to the second step of examining their multivariate relationships.

[6] The handbook – officially endorsed by the OECD high level statistical committee, describe ten recursive steps for developing an index:[7] As suggested by the list, many modelling choices are needed to construct a composite indicator, which makes their use controversial.

[8] A sociological reading of the nature of composite indicators is offered by Paul-Marie Boulanger, who sees these measures at the intersection of three movements:[9] A subsequent work by Boulanger [10] analyses composite indicators in light of the social system theories of Niklas Luhmann to investigate how different measurements of progress are or are not taken up.