Eckey, Hans-Friedrich Kosfeld, Reinhold Türck, Matthias
Year of Publication:
Volkswirtschaftliche Diskussionsbeiträge No. 90
Universität Kassel, Fachbereich Wirtschaftswissenschaften, Kassel
The indicators get different weights, when they are summarised to one figure. This weighting scheme is problematic for different reasons. On the one hand, the used transformations of the variables are non-permissible. On the other hand, the weighting of the indicators is not meaningful, because they are strongly correlated with one another. Both problems are discussed. In particular the factor analysis is an effective instrument in order to eliminate the correlations between the single indicators. The comparison of our results and the calculations of the Gemeinschaftsaufgabe shows no big differences concerning the ranking of regions. Our control calculations prove that the long discussed weighting problem is methodically efficiently solvable. In addition, small changes of ranks can lead to the fact that regional aid is granted to a region or not.
Regional Policy Composable Indicator Labour Market Regions