An Economic Wellbeing Index for the Spanish Provinces: A Data Envelopment Analysis Approach

Abstract

This article presents the estimation of a synthetic economic wellbeing index using Data Envelopment Analysis (DEA). The DEA is a multidimensional technique that has its origins in efficiency analysis, but its usage within the social indicators context is particularly appropriate. It allows the researcher to take advantage of the inherent flexibility of DEA when assigning weights to the factors. The model itself carries out the aggregation and weighting of 8 partial indicators, which attempt to describe the four components of economic wellbeing suggested by Osberg (Royal Commision on the Economic Union and Development Prospects for Canada (University of Toronto Press, 1985)), in order to assess the economic wellbeing of the 50 Spanish provinces. By using the index obtained in the analysis a “ranking” of the provinces is obtained. This ranking proves to be relatively similar to the one that corresponds to per capita income, although there are significant differences.