Student ID____________________ Name________________________

Exercise 2 - Decision Models Better Life Index (OECD 2011) You are now at the end of your program of study and you are planning to spend a full year to learn English and to gain an insiders view of a country very different from yours, that you havent visited even for a very short period. You have decided to focus on Australia and Canada. While browsing to get more information on those 2 countries, you came across a study realized by OECD the Organization for Economic Cooperation and Development, known as the Better Life Index, that purports to give a rich set of socio-economic indicators about the Organizations members (if you are curious about it, you can check with them).

Table 1. Value of different aspects of the Life Index for Australia e Canada australia 9.3 3.2 8.4 8.8 7.2 9.2 9.4 8.9 9.0 9.2 6.5 canada 9.6 4 8.4 8.7 9 9.1 5.6 8.7 9.6 9.2 7.1

Housing Income Jobs Community Education Environment Governante Health life satisfaction Safety work-life balance

To come to a decision, you are applying 2 very different decision models, combining those variables in different ways: Expected value model ratings are based on the value of attributes, weighted by the importance of each attribute: Expected Value Country i = attribute level, w = attribute importance. Lexicographic model countries are ranked based on the most important attribute; if there is a tie, the next most important attribute is taken into account; and so on.
n

w
k =1

x ik , with i = country, k = attribute, x = perceived

Please answer the following questions: 1. Using the expected value model, and giving the same importance to each attribute, which country would you choose?________________ 2. Give the attributes the importance YOU assign to each of them (from 0 to 1; the sum must be equal to 1). Show here the values: Housing Income Jobs Community Education Environment Governante Health Life satisfaction Safety Work-life balance total

=1

With these weight, which country would you choose? ________________ 3. With the lexicographic model, what would be your choice, if you give the most importance a. First to education, second to safety? ________________ b. First to safety, second to education? ________________