Constructing Composite Indices: Some Lessons from Developing an Economic and Social ‎Rights Fulfillment Index for Egypt

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Mathematics & Actuarial Science Department

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Eman Refaat; Ali Hadi

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Research Article

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International Journal of Sociology and Social Policy

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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. Design/methodology/approach: 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. Findings: 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. Research limitations/implications: The ESRFI is not very current because it is based on the 2010 Egyptian Household Conditions Observatory Survey (EHCOS), which is the latest published version of the survey with complete variables for the index data. When the next EHCOS becomes available, an updated ESRFI can be easily and quickly constructed. Practical implications: The ESRFI could strengthen policy formulation that takes into account ESRF, especially by highlighting the situation in different regions and disaggregation levels. Social implications: 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.

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