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Abstract
Happy Planet Index (HPI) is an aggregated index that measures the extent to which each nation produces long and happy lives per unit of environmental input. The HPI uses global data on life expectancy, experienced well-being, and ecological footprint to rank countries. The last HPI report was published in 2012 and it contains data for 151 countries from all continents. The aim of the paper is to re-calculate the HPI using DEA models and other multiple criteria decision making techniques and compare the results obtained results. MCDM methods evaluate alternatives (countries) according to the set of criteria with respect to given preferences. Most of them allow ranking of alternatives according to aggregated indices defined by various methods. DEA models compare the countries with the best performers in the data set and measure the efficiency of transformation of multiple inputs into multiple outputs. Even though they are based on different principles than MCDM methods they allow ranking of evaluated units according to their efficiency or super-efficiency scores. The paper analyzes both methodological approaches and compares their results.
Keywords: Data envelopment analysis, MCDM, Happy Planet Index, efficiency
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1 Introduction
There are many attempts to compare the level of development of world countries from different points of view. The best-known and oldest characteristic is the human development index (HDI) which has been published by the United Nations Development Programme (UNDP) since 1990. It is an aggregated measure that is based on four criteria: life expectancy at birth, adult literacy rate, combined enrolment ratio, and GDP per capita.
A multiple criteria decision making problem (MCDM) consists in the selection of a "best" (compromise) alternative or, more generally, ranking of all alternatives. In a narrow sense one of the characteristics of the MCDM problem is the presence of the decision maker's preferences that can be given in several quite different ways. The most common way how the DM's expresses his/her preferences is the selection of the set of criteria and the specification of their weights. In a broader sense MCDM problems are any problems where a set of alternatives is evaluated with respect to the given set of criteria. This set of criteria and their weights can be determined by a discussion...