Annexes
values for the dataset are decided such that
anything below the minimum is assigned 0, anything
above the maximum is assigned 1, and everything
else is scaled evenly between 0 and 1. Depending on
the nature of the data, the banding process can take
different forms.
For example, in the ‘Secondary school enrolment’
indicator, a higher score reflects a more desirable
situation. Therefore, in this case the banding
process requires the largest data point to be
assigned a value of 1. Conversely the lowest data
point in the indicator is assigned 0, while all other
data are scaled relative to these two points. This
process is referred to as forward banding. On the
other hand, in the indicator ‘Youth mortality’, a lower
score reflects a more desirable situation. In this
case, the data are reverse banded, so the lowest
value is assigned 1 in the banding process, while the
highest is assigned 0.
Therefore, in year y, a forward banded score is
calculated for indicator i by Equation 1. A reverse
banded score is calculated by Equation 2.
Equation 1. Banding equation
Bandedi =
Country indicator value in year y i − Mininum cutoffi
Maximum cutoffi − Mininum cutoffi
Equation 2: Reverse banding equation
Reverse Bandedi =
Country indicator value in year y i − Mininum cutoffi
1−
Maximum cutoffi − Mininum cutoffi
An integral part of this process is to set appropriate
minimum and maximum cutoff values for the
banded scores; empirical and normative methods
are available to do this. While some data may be
distributed normally and therefore lend themselves
well to standard and well-defined mathematical
techniques, such as defining outliers as those
greater than three standard deviations from the
mean, other datasets do not follow well-behaved
trends. The final choice of which technique to use
must depend on a number of considerations: the
nature of the data, the underlying distribution,
the purpose of the index, what information is
being conveyed, and so on. When investigating
the global datasets used in the YDI, very few of
the distributions can be classified as normal. The
presence of outliers affects not only the average,
but also the variance, skewing both the minimum
and maximum values.
To account for this, the Institute for Economics and
Peace in some instances set artificial minimums
and maximums to ensure results are not too heavily
influenced by outliers. In the cases where outliers
are present, the lower bound set for the banding
process are set as the lowest data point that is
within 1.5 times the inter-quartile range below
the first quartile (where the inter-quartile range is
defined as the distance between the first and third
quartiles). Similarly, the upper bound set for the
banding process are set as the largest data point
that is within 1.5 times the inter-quartile range
above the third quartile. The following section
details where this process has been used and
illustrates the application of the process to the
distributions of the indicators. The bands obtained
by this process are shown in Table A2.7. Outlier
results have been trimmed.
A2.5 Weighting indicators and domains
Table A2.8 shows the indicators and weights used
in the YDI. The YDI assigns equal weight to the
domains of Education, Health, Employment, and
Participation (civic plus political participation).
Within domains, each indicator is weighted by its
relative importance to the other indicators in the
domain. There are a number of methods available5
to decision-makers, including data envelopment
analysis, benefit of the doubt approach and
unobserved components.
The YDI uses a set of three primary indicators
to align overall scores with broader human
development priorities: youth literacy rate, youth
mortality rate and youth NEET rate. Primary
indicators are weighted more heavily than others in
the index. It is important to note that these primary
indicators have a major impact on domain scores,
in some cases giving countries a more pronounced
domain score regardless of their overall rank in
the YDI.
A realignment of weightings to better represent
the current development issues has resulted in
rank changes for many countries in this iteration
of the YDI. The only time series comparison
recommended by IEP is to use this iteration across
the years provided.
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