Benchmarking the Competitiveness of Nations: Benevolence versus Equal Treatment?
Benchmarking the Competitiveness of Nations: Benevolence versus Equal Treatment?
This chapter presents a method for determining weights that are specific to each country and which reflect each’s relative performance across different dimensions of competitiveness. It focuses on the issue of aggregation, that is, how to select the weights to be applied to the primitive subindicators (variables) used to form a composite index. A simple and often popular aggregation procedure is to assign equal weights to each subindicator. Unequal weighting is desired when the different subindicators do not share the same relative importance. Unequal weights can be derived by informed judgments of external experts, but these opinions often are too divergent to settle on one set of acceptable weights. The cost of obtaining such weights can also be high. The method presented addresses these issues in that it requires less information but nonetheless reveals preferences.
Keywords: weights, competitiveness, aggregation, composite index
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