This open access book covers the use of data science, including advanced machine learning, big data analytics, Semantic Web technologies, natural language processing, social media analysis, time ...series analysis, among others, for applications in economics and finance. In addition, it shows some successful applications of advanced data science solutions used to extract new knowledge from data in order to improve economic forecasting models. The book starts with an introduction on the use of data science technologies in economics and finance and is followed by thirteen chapters showing success stories of the application of specific data science methodologies, touching on particular topics related to novel big data sources and technologies for economic analysis (e.g. social media and news); big data models leveraging on supervised/unsupervised (deep) machine learning; natural language processing to build economic and financial indicators; and forecasting and nowcasting of economic variables through time series analysis. This book is relevant to all stakeholders involved in digital and data-intensive research in economics and finance, helping them to understand the main opportunities and challenges, become familiar with the latest methodological findings, and learn how to use and evaluate the performances of novel tools and frameworks. It primarily targets data scientists and business analysts exploiting data science technologies, and it will also be a useful resource to research students in disciplines and courses related to these topics. Overall, readers will learn modern and effective data science solutions to create tangible innovations for economic and financial applications.
Alcohol consumption causes an estimated 4% of the global disease burden, prompting governments to impose regulations to mitigate the adverse effects of alcohol. To assist public health leaders and ...policymakers, the authors developed a composite indicator-the Alcohol Policy Index-to gauge the strength of a country's alcohol control policies.
The Index generates a score based on policies from five regulatory domains-physical availability of alcohol, drinking context, alcohol prices, alcohol advertising, and operation of motor vehicles. The Index was applied to the 30 countries that compose the Organization for Economic Cooperation and Development and regression analysis was used to examine the relationship between policy score and per capita alcohol consumption. Countries attained a median score of 42.4 of a possible 100 points, ranging from 14.5 (Luxembourg) to 67.3 (Norway). The analysis revealed a strong negative correlation between score and consumption (r = -0.57; p = 0.001): a 10-point increase in the score was associated with a one-liter decrease in absolute alcohol consumption per person per year (95% confidence interval, 0.4-1.5 l). A sensitivity analysis demonstrated the robustness of the Index by showing that countries' scores and ranks remained relatively stable in response to variations in methodological assumptions.
The strength of alcohol control policies, as estimated by the Alcohol Policy Index, varied widely among 30 countries located in Europe, Asia, North America, and Australia. The study revealed a clear inverse relationship between policy strength and alcohol consumption. The Index provides a straightforward tool for facilitating international comparisons. In addition, it can help policymakers review and strengthen existing regulations aimed at minimizing alcohol-related harm and estimate the likely impact of policy changes.
Multidimensional measures (composite indicators, indices, ratings, league tables) can effectively underpin the development of data-driven narratives in support to policy. A controversy surrounds the ...use of these measures. We review some good and bad practices from the recent literature. We then discuss briefly a decalogue to develop a multidimensional measure. We argue in favor of a multi-modeling approach to represent different scenarios in the construction of an aggregate measure prior to drawing recommendations for policy making. Finally, we try to establish a link between the analytic use of well-designed aggregate measures and the development of a robust culture of evaluation of policies based on evidence. An application of these concepts and tools to the Rule of Law index developed by the World Justice Project is given.
•Composite indicators are widely used in sustainable development and elsewhere.•The effect of weights used in aggregating indicators is complex.•Three tools are presented which help developers and ...users to investigate effects of weights.•Case studies related to sustainable development demonstrate the benefits.
Composite indicators are very popular tools for assessing and ranking countries and institutions in terms of environmental performance, sustainability, and other complex concepts that are not directly measurable. Because of the stakes that come with the media attention of these tools, a word of caution is warranted. One common misconception relates to the effect of the weights assigned to indicators during the aggregation process. This work presents a novel series of tools that allow developers and users of composite indicators to explore effects of these weights. First, the importance of each indicator to the composite is measured by the nonlinear Pearson correlation ratio, estimated by Bayesian Gaussian processes. Second, the effect of each indicator is isolated from that of other indicators using regression analysis, and examined in detail. Finally, an optimisation procedure is proposed which allows weights to be fitted to agree with pre-specified values of importance. These three tools together give developers considerable insight into the effects of weights and suggest possibilities for refining and simplifying the aggregation. The added value of these tools are shown on three case studies: the Resource Governance Index, the Good Country Index, and the Water Retention Index.
Asia and Europe have made connectivity between people, businesses and institutions a top political priority in the frame of the Asia-Europe Meeting (ASEM) intergovernmental cooperation forum. In the ...ASEM context, policy leaders agreed that improving connectivity between countries should contribute to achieve the Sustainable Development Goals. Connectivity is a complex concept involving multiple dimensions. Yet in order to provide clear data-driven evidence to support policymaking on Asia-Europe sustainable connectivity, this concept calls for a measurement framework. The mismatch between the politically adopted definition of sustainable connectivity and existing metrics, led to the development of the two indexes described in this paper. Taken together, they help to explore and understand the relationship between connectivity and sustainability. The results suggest that connectivity and sustainability policy agendas have the potential to mutually reinforce one another. Higher values in connectivity are strongly associated with higher values in the social dimension of sustainability. There are evident gaps between European and Asian nations in terms of connectivity and sustainability. However, both continents are underpinned by the common challenge of reducing the environmental impacts of connectivity without neglecting economic/financial sustainability aspects, while at the same time ensuring that benefits will accrue to society at large.
Ratings and rankings: voodoo or science? Paruolo, Paolo; Saisana, Michaela; Saltelli, Andrea
Journal of the Royal Statistical Society. Series A, Statistics in society,
June 2013, Letnik:
176, Številka:
3
Journal Article
Recenzirano
Composite indicators aggregate a set of variables by using weights which are understood to reflect the variables' importance in the index. We propose to measure the importance of a given variable ...within existing composite indicators via Karl Pearson's 'correlation ratio'; we call this measure the 'main effect'. Because socio-economic variables are heteroscedastic and correlated, relative nominal weights are hardly ever found to match relative main effects; we propose to summarize their discrepancy with a divergence measure. We discuss to what extent the mapping from nominal weights to main effects can be inverted. This analysis is applied to six composite indicators, including the human development index and two popular league tables of university performance. It is found that in many cases the declared importance of single indicators and their main effect are very different, and that the data correlation structure often prevents developers from obtaining the stated importance, even when modifying the nominal weights in the set of non-negative numbers with unit sum.
•We apply Data Envelopment Analysis (DEA) to develop an alternative version of the European Commission’s Cultural and Creative Cities Index.•We provide an index score that reflects expert opinion, ...cities’ diverse socio-economic backgrounds, and observed relative strengths.•The application of Benefit-of-the-Doubt (BoD) weights implies that, on average, cities improve their performance by approximately 16 percentage points.•We also identify peer cities and target values for performance improvement within a cluster of cities sharing similar demographic and socio-economic features.•We practically illustrate how Bilbao, Krakόw and Umeå can draw policy insights from their benchmarks, showing how DEA can work as a powerful tool for peer learning.
Culture is an integral part of a city's quality of life, a driver of urban change, and a genuine economic sector. To support benchmarking of urban culture and facilitate peer learning amongst policymakers, the European Commission has recently created the ‘Cultural and Creative Cities Index’. While this index builds on a standardised method to aggregate 29 indicators for the 155 selected cities, it is explicitly acknowledged that a ‘gold standard’ for a ‘Cultural and Creative City’ does not exist. Instead, different approaches should be allowed for in capturing cities’ cultural and creative vitality. This is the point of departure for this paper, which employs a Benefit-of-the-Doubt (BoD) modelling approach to allow cities to combine such respect for performance diversity with peer learning and benchmarking. Expert-based weights are used to provide expert-consistent bounds for the shares of key dimensions in a city's final BoD index value. We identify three city clusters, amongst which there are large performance differences. Accordingly, we focus on the within-group identification of peer cities and target values, which we illustrate in more detail for Bilbao, Krakόw and Umeå, towards the formulation of fit-for-purpose policy measures that can support culture-led development.
Munda G. and Saisana M. Methodological considerations on regional sustainability assessment based on multicriteria and sensitivity analysis, Regional Studies. This paper proposes the use of a ...non-compensatory multicriteria approach combined with sensitivity analysis for constructing composite indicators of sustainability. An illustrative example on Spanish and selected Mediterranean regions is used. The sensitivity analysis shows that excluding an indicator from a twenty-nine-indicator data set (which represents, in principle, a small structural change) has a much lower impact on the regional ranking if that is based on a non-compensatory multicriteria approach than on the classical linear aggregation, for example the weighted arithmetic average. An alternative approach that employs endogenous weighting (region-specific weights) and is based on data envelopment analysis is discussed.
Munda G. et Saisana M. Des considérations méthodologiques basées sur une analyse à critères multiples et de sensibilité quant à l'évaluation de la notion de la région durable, Regional Studies. Cet article propose l'emploi d'une façon à critères multiples non-compensatoire conjointement avec une analyse de sensibilité afin de construire des indicateurs composites de la notion de durabilité. A titre d'illustration, on se sert des régions espagnoles et de certaines régions méditerranéennes. L'analyse de sensibilité laisse voir que ne pas retenir un indicateur dans un ensemble de données de vingt-neuf indicateurs (ce qui représente, en principe, une modification structurelle négligeable) a un impact nettement plus faible sur le rang régional si celui-ci est basé sur une façon à critères multiples non-compensatoire que sur une agrégation classique linéaire, par exemple la moyenne arithmétique pondérée. Une autre façon qui emploie une pondération endogène (des pondérations spécifiques à une région) et basée sur une analyse de l'enveloppement des données.
Durabilité régionale Indicateurs composites Evaluation à critères multiples Analyse de sensibilité
Munda G. und Saisana M. Methodologische Aspekte bei der Bewertung der regionalen Nachhaltigkeit mit Hilfe einer multikriteriellen und Empfindlichkeitsanalyse, Regional Studies. In diesem Beitrag wird für die Entwicklung von kombinierten Nachhaltigkeitsindikatoren ein nicht kompensatorischer multikriterieller Ansatz in Kombination mit einer Empfindlichkeitsanalyse vorgeschlagen. Als Beispiel zur Verdeutlichung dienen spanische und ausgewählte Mittelmeerregionen. Wie aus der Empfindlichkeitsanalyse hervorgeht, wirkt sich der Ausschluss eines Indikators aus einem Datensatz mit 29 Indikatoren (was im Prinzip einer geringfügigen strukturellen Veränderung gleichkommt) weitaus weniger stark auf den regionalen Rang aus, wenn die Rangordnung statt auf der klassischen linearen Aggregation (z. B. dem gewichteten arithmetischen Durchschnitt) auf einem nicht kompensatorischen multikriteriellen Ansatz aufbaut. Es wird ein alternativer Ansatz erörtert, bei dem eine endogene Gewichtung (mit regionalspezifischen Gewichten) zum Einsatz kommt und der auf einer Dateneinhüllanalyse basiert.
Regionale Nachhaltigkeit Kombinierte Indikatoren Multikriterielle Bewertung Empfindlichkeitsanalyse
Munda G. y Saisana M. Consideraciones metodológicas sobre la valoración de la sostenibilidad regional basada en diferentes criterios y un análisis de sensibilidad, Regional Studies. En este artículo proponemos el uso de un planteamiento de varios criterios no compensatorios que combinamos con un análisis de sensibilidad para construir indicadores compuestos de sostenibilidad. Utilizamos un ejemplo ilustrativo con regiones españolas y regiones mediterráneas seleccionadas. El análisis de sensibilidad muestra que si excluimos un indicador de un grupo de datos formado por veintinueve indicadores (lo que, en principio, representa un pequeño cambio estructural) tiene un impacto mucho menor en la clasificación regional si ésta se basa en un planteamiento de varios criterios no compensatorios en vez de la agregación lineal clásica (por ejemplo el promedio aritmético ponderado). Aquí analizamos un enfoque alternativo que emplea la ponderación endógena (ponderaciones específicas a las regiones) y está basado en un análisis envolvente de datos.
Sostenibilidad regional Indicadores compuestos Evaluación de muchos criterios Análisis de sensibilidad
How can we measure culture in urban areas? Can empirical metrics on culture function as an urban planning tool for cities' well-being? This paper fits into the research path examining the role of ...culture as a resource for development, with a specific focus on empirical measurement aspects. A novel dataset (The Cultural and Creative Cities Monitor – CCCM) gathering 29 indicators for 168 cities in 30 European countries is presented. The CCCM measures the presence and attractiveness of cultural venues and facilities (Cultural Vibrancy), the capacity of culture to generate jobs and innovation (Creative Economy), and the conditions enabling cultural and creative processes to thrive (Enabling Environment). Results show that cultural and creative assets are diversely distributed across European cities, which offer local authorities the opportunity to design context-specific development strategies. In particular, many medium-sized cities appear to have, on average, more cultural capital assets per inhabitant than larger cities. On the basis of these findings, we draw conclusions on the conceptual and methodological relevance of the CCCM and advance proposals on how to further use the CCCM data to drive culture-led and evidence-based urban policy design.
•The Cultural and Creative Cities Monitor (CCCM) is a novel culture-specific dataset covering 168 European cities.•It gathers 29 indicators which relate to the Cultural Vibrancy, Creative Economy and Enabling Environment of a city.•Capitals generally lead on ‘Creative Economy’ but non-capitals, mostly medium-sized, do better on ‘Cultural Vibrancy’.•The CCCM dataset - freely accessible - can support policy-relevant questions and evidence-led urban planning.
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