HIP — a Happier Index for the Planet?

Measuring complex and rather intuitive qualities such as sustainability requires combining variety of measures together. The resulting composite indicator depends not only on the component sub-indices but also on the way they... [ view full abstract ]

Measuring complex and rather intuitive qualities such as sustainability requires combining variety of measures together. The resulting composite indicator depends not only on the component sub-indices but also on the way they are combined together. We are considering the Happy Planet Index (HPI) as an example of a composite sustainability indicator that aggregates information on positive qualities like life-expectancy and human wellbeing with negative ones like ecological footprint to rank countries according to their sustainability state. However, since component indices are often mutually correlated and feature quite different distributions of entities ranked, elaborate rules are used in the process of combination. As a result, the resulting composite index may look somewhat contrived and its rankings may depend heavily on subjective parameters in the combination process. We propose a geometrically motivated parameter-free method for combining indices with contrasting effects together. The method is independent of the number of sub-indices to be combined and eliminates mutual correlation between component indices by using Singular Value Decomposition (SVD) analysis. By applying our methodology, we reconstruct the latest Happy Planet Index results (2016) and prove the feasibility of the proposed approach. As a result we conclude that altering the measures of life expectancy and wellbeing with the inequality adjustments improves the objectivity of the sustainable wellbeing assessment.

Keywords: Sustainability indicators, Composite indicator, Singular value decomposition, Happy Planet Index