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A new index of welfare - An econometric approach on a new index of welfare generated with principal component analysis

Edfeldt, Johan LU (2010) NEKK01 20101
Department of Economics
Abstract
Purpose: The purpose of this essay is to generate a wider measurement of welfare by carefully chosen variables in mainly three different areas: economic, socio-economic and environment in order to generate a welfare index which describes the world yesterday, today and tomorrow.

Method: With the Principal Component Analysis 14 variables from 115 coun-tries are studied and verified and analyzed with regression models, clus-ter analysis and time series analysis.

Conclusion: In the present of 2008 the Generated Index explains the HDI and DI in a fairly good way thus it has the possibility to replace the two of them. However in a longer period of time the index is not to be equal to HDI. As for the DI there is only data for a couple of... (More)
Purpose: The purpose of this essay is to generate a wider measurement of welfare by carefully chosen variables in mainly three different areas: economic, socio-economic and environment in order to generate a welfare index which describes the world yesterday, today and tomorrow.

Method: With the Principal Component Analysis 14 variables from 115 coun-tries are studied and verified and analyzed with regression models, clus-ter analysis and time series analysis.

Conclusion: In the present of 2008 the Generated Index explains the HDI and DI in a fairly good way thus it has the possibility to replace the two of them. However in a longer period of time the index is not to be equal to HDI. As for the DI there is only data for a couple of years and con-clusion of this cannot be drawn during a longer period of time. The Generated Index could instead perhaps be used as a crisis predictor of some sort. The correlation with the different crisis during the time period 1960-2008 is imminent and with some extended study of the model a better crisis predictor can possibly be created. (Less)
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author
Edfeldt, Johan LU
supervisor
organization
course
NEKK01 20101
year
type
M2 - Bachelor Degree
subject
keywords
Welfare, Well-being, Principal Component Analysis (PCA), Cluster analysis, 1960-2008
language
English
id
1612856
date added to LUP
2010-06-18 14:15:10
date last changed
2010-06-18 14:15:10
@misc{1612856,
  abstract     = {Purpose: The purpose of this essay is to generate a wider measurement of welfare by carefully chosen variables in mainly three different areas: economic, socio-economic and environment in order to generate a welfare index which describes the world yesterday, today and tomorrow.

Method: With the Principal Component Analysis 14 variables from 115 coun-tries are studied and verified and analyzed with regression models, clus-ter analysis and time series analysis.

Conclusion: In the present of 2008 the Generated Index explains the HDI and DI in a fairly good way thus it has the possibility to replace the two of them. However in a longer period of time the index is not to be equal to HDI. As for the DI there is only data for a couple of years and con-clusion of this cannot be drawn during a longer period of time. The Generated Index could instead perhaps be used as a crisis predictor of some sort. The correlation with the different crisis during the time period 1960-2008 is imminent and with some extended study of the model a better crisis predictor can possibly be created.},
  author       = {Edfeldt, Johan},
  keyword      = {Welfare,Well-being,Principal Component Analysis (PCA),Cluster analysis,1960-2008},
  language     = {eng},
  note         = {Student Paper},
  title        = {A new index of welfare - An econometric approach on a new index of welfare generated with principal component analysis},
  year         = {2010},
}