A Non-compensatory Approach for the Measurement of the Quality of Life

Assessing the quality of life (QoL) at different levels (neighbourhood, city or country) requires the definition of intermediate objectives whose achievement can be observed and measured by individual indicators. In this chapter, we consider the QoL data in Italy, at provincial level, used by the Italian economic newspaper Il Sole 24ore in 2010. The set of indicators gives complete information about the phenomenon, but the multidimensionality and the different units of measurement of the indicators can complicate the reading and the analysis of the results. Il Sole 24ore normalizes the indicators using a ‘distance to a reference’ and summarizes them by simple arithmetic mean. Nevertheless, this method does not make the indicators independent of the variability and assumes a full substitutability among the components of the index: a deficit in one dimension may be compensated by a surplus in another. To overcome these limitations, we propose a non-compensatory composite index which normalizes the indicators by a traditional ‘standardization’ and summarizes the indices of each dimension using a penalty for the provinces showing ‘unbalanced’ values of the indicators. A comparison between the approach adopted by Il Sole 24ore and the proposed method is finally presented.