What is it about?

The purpose of this paper is to construct, for the first time, composite index for Egypt that measures the economic and social rights fulfillment (ESRF) based on socioeconomic surveys at the household/ individual levels. The paper highlights some of the statistical debatable issues about composite indices and focuses mainly on six of them. Those issues are indicators selection, handling missing data, identification of and dealing with outliers, scale of measurement, computing the margin of error, weights assigned for indicators and domains and aggregation method. Handling these problematic issues gave rise to a rigorous index. The quality of economic and social rights fulfillment index (ESRFI) is judged by its bootstrap standard error. Based on these margin of errors, confidence intervals can be computed and rigorous comparisons across all disaggregation levels of the ESRFI can be made. The results shows that the overall index is accurate and representative in measuring the ESRF in Egypt. Comparisons between rural and urban regions indices show that the rural areas are always worse than the urban areas in all levels of dimensions, especially for the Right to Education and Adequate Housing.

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Why is it important?

The ESRFI could strengthen policy formulation that takes into account ESRF, especially by highlighting the situation in different regions and disaggregation levels. The proposed ESRFI would strengthen policy formulation that takes into account ESRF, especially by highlighting the situation in different regions and different disaggregation levels. Originality/value – The paper emphasizes the importance of recognizing and handling of the six problematic issues that arise when constructing composite indices. The paper presents the first ESRFI for Egypt and demonstrates the rigor of its construction.

Perspectives

A composite index should be understandable and easy to describe, conformable with “common sense” notions of the phenomenon, able to guide policy, technically solid, operationally viable and easily replicable. This paper constructs the first index that measures the fulfillment of economic and social rights in Egypt. The proposed ESRFI is based on the Socio-Economic Surveys 2010. During the construction of such an index, the paper highlights some of the statistical debatable issues about composite indices and focuses mainly on the following six: indicators selection, handling missing data, identification of and dealing with outliers, scale of measurement (normalization), the margin of error, and weights and aggregation. Identifying and dealing with these issues determine to what extent the index is rigorous (in terms of stability and variance) and efficient in describing the phenomenon of interest.

Eman Refaat
Dubai Economic Department

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This page is a summary of: Constructing composite indices, International Journal of Sociology and Social Policy, March 2018, Emerald,
DOI: 10.1108/ijssp-12-2016-0135.
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