Matteo Mazziotta, Adriano Pareto

Assessing quality of regional development from a non-compensatory point of view: measure and graphical representations

It has long been accepted that material well-being, as measured by GDP per capita, cannot alone explain the development in a geographical area. Several have been the attempts to construct alternative, non-monetary measures of social and economic well-being by combining in a single index a variety of different dimensions that are thought to represent development.
Since 2003, the Italian campaign “Sbilanciamoci!” has published a yearly report on the quality of regional development (QUARS) where the 20 regions making up Italy are ranked on the basis of 41 individual indicators divided into 7 dimensions: environment, economy and labour, rights and citizenship, health, cultural and educational level, equal opportunities, political and social participation. After the normalization of the variables, the mean values of 7 macro-indicators are calculated and the composite index corresponds to the simple average of these values.
The aim of this work is to compare different methodological approaches for summarizing data. It is known that the arithmetic mean assumes a full substitutability among the components of the index: a deficit in one dimension may be compensated by a surplus in another. However, a complete compensability among the principal dimensions of development is not desirable. Therefore, a non-compensatory approach is presented and a graphical method for visualizing the results is shown.
The differences between the two approaches provide some reflections about the basic assumptions and the choice of the more appropriate aggregation method.