A new approach for index construction: The case of the road user behavior index

Abstract

In recent years, composite indicators have become increasingly recognized as a useful tool for performance evaluation, benchmarking, and decision-making by summarizing complex and multidimensional issues. In this study, we focus on the application of data envelopment analysis (DEA) on index construction in the context of road safety and highlight the shortcomings of using the classical DEA models. The DEA method assigns a weight to each indicator by selecting the best set of weights for the unit under evaluation. The flexibility in selecting the weights in the classical DEA approach may lead to two interrelated problems: compensability and unfairness. These shortcomings are, respectively, overcome traditionally by imposing weight restrictions and applying a common weights approach. However, the problem of evaluating a layered hierarchy of indicators with a common set of weights (CSW) has not been addressed in the literature. To fill this gap, we propose a new approach for index construction to determine an optimal CSW to assess all units simultaneously while reflecting the hierarchical structure of the indicators in the model. The applicability of the suggested common-weight approach is illustrated by a case study on constructing a road user behavior index for a set of European countries. From a theoretical point of view, our approach provides a fair and identical basis for evaluation and comparison of countries in terms of driver's behaviors and, from a practical point of view, it significantly reduces the required computational burden for solving the formulated model. The obtained results clarify the sharper discrimination power of our model compared to the other methods in the literature.