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A DEA Approach to Measure the Quality-of-Life in the Municipalities of the Canary Islands
´ Juan Carlos Martın • Cira Mendoza
Accepted: 28 May 2012 Ó Springer Science+Business Media B.V. 2012
Abstract The notion of the quality of life has always intrigued economists, sociologists and other researchers in the area of social science. Since the genesis of the deﬁnition of Gross Domestic Product (GDP) as a truthful measure of well-being and economic development, other sophisticated methodologies have been proposed in the literature to measure the quality-of-life (QOL) that extend in a multidimensional way this complex concept. Measuring QOL in municipalities consists in ﬁnding a set of comparable attributes that can be weighted by some metric in order to construct a synthetic index. Thus, the narrow vision obtained by a single measure as the GDP, in which differences in the QOL cannot be fully analyzed, is overcome. Based upon a reﬁnement of data envelopment analysis (DEA)—the cross-efﬁciency method, the current paper develops a synthetic QOL index that is based in 19 partial indicators which present the tradeoffs of different dimension for the 87 municipalities of the Canary Islands in Spain. Marginal rates of substitution are calculated to evaluate the tradeoffs on QOL dimensions. A method is also proposed to determine the scores chart of each municipality which can be used as a tool to policy makers in order to establish a program of improving the ranking position of the municipality identifying the critical QOL factors. Keywords Quality-of-life Á Well-being Á DEA Á Cross-efﬁciency Á Synthetic index
1 Introduction Traditionally, since its development in the 1930s, Gross Domestic Product (GDP) has been considered as the unique and truthful measure of well-being and economic development. It is a measure geared to gauge well-being wholly based on material wealth, unable to
´ J. C. Martın (&) Á C. Mendoza Faculty of Economics, Business and Tourism, Universidad de Las Palmas de Gran Canaria, D.2.13, 35017 Las Palmas de Gran Canaria, Spain e-mail: firstname.lastname@example.org C. Mendoza e-mail: email@example.com
purchasing power of goods and services. 2003). 2011. different lines characterized by the different objectives pursued may exist. The Organization for Economic Co-operation and Development (OECD). in 2008 the French government. concerned by the limits of GDP as an indicator of social progress and economic performance. There has been an increasingly concern in developing measures of well-being which evaluate factors that have an impact on the standard of living and go beyond purely income based estimations.´ J. when President Johnson instructed the Department of Health. and economic insecurity. QOL should include economic. Royuela et al. education. leisure. education and skills. the Index of Economic Well-Being (IEWB) or the Quality of Life Index. Works began around 1966. considered creating the Commission on the Measurement of Economic Performance and Social Progress (CMEPSP). 2005. Data availability constraints preclude researchers to use some variables in the QOL analysis. personal activities. environmental conditions. Along the same lines. A notable study in this ﬁeld is the seminal work of Easterlin (1974). In the research about this notion. ‘‘Too much emphasis on GDP as the unique benchmark can lead to misleading indications about how well-off people are and run the risk of leading to the wrong policy decisions’’. Mendoza measure how well-off people live beyond the economic activity. conducted a study in 1982 to identify the common social concerns of most member countries. In this respect. It established as the most important areas to measure QOL the followings: health. These dimensions are: health. But it is intensely accepted that QOL is a multidimensional measure in which the general concept of well-being is based. Rahman et al. social and environmental dimensions of well-being. whose ﬁnal report was published in 2009 (see Stiglitz and Sen 2009). The conference ‘‘Beyond GDP’’ was organised with the aim of exploring how to improve the measurement of progress and well-being of nations. personal insecurity. the European Commission launched a successful initiative in 2007. the CMEPSP in its ﬁnal report determined which elements should belong to the list of QOL features. these authors corroborate that market-based measures of wellbeing need to be complemented by other non-monetary indicators. C. Education and Welfare to address the development of statistics and indicators that provide information about areas of interest. The HDI is a composite index to benchmark countries aggregating three basic dimensions into a summary measure. Martın. employ and quality of working life. the Beyond GDP partners continue to work on improving these measures. and personal security. C. education and income. See Hagerty et al. social environment. These elements are very similar to those of the OECD: health. Probably the best known yardstick of well-being that complements GDP with nonmonetary indicators is the Human Development Index (HDI). and the different methodologies employed using a great variety of factors highlight the ambiguity of the concept. (2001) and Bandura (2008) to consult a large number of indices which add non-monetary indicators to measure well-being. who asserted that gains in higher income did not have to be necessarily accompanied by greater happiness. physical environment. As Stiglitz and Sen (2009) mention. The United States led the research in this ﬁeld. Other indices are the Genuine Progress Indicator (GPI). social connections. It has been published by the United Nations Development Programme (UNDP) in their Human Development Reports since 1990 to date. Quality-of-life (QOL) is a broad and complex concept studied by diverse disciplines. for example. After its success. concretely in economics. Gonzalez et al. In the recent years the European Commission is working very hard in order to provide adequate 123 . political voice and governance. At present there is a large frame ´ ´ of work in this area of research (Berenger and Verdier-Chouchane 2007. In this sense. More recently. To construct acceptable measures is necessary to have databases that allow the study of factors affecting QOL.
La Gomera. which form the province (NUTS III) of Santa Cruz de Tenerife. Its use is increasingly growing due to its ability to provide comparability and illustrate complex multidimensional issues. therefore. The improvement of the way the indicators are constructed and used seems to be a very important issue from both theoretical and empirical points of view. 1 NUTS represents the initials for Nomenclature of Territorial Units for Statistics used by the European Union for statistical purposes. 4. QOL is often associated to the opportunities available to people. information is still scarce. 123 . at the national level. QOL comes from both the objective dimension as well as the subjective. But if they are poorly constructed they may lead to inappropriate interpretations and. The rest of the paper is organized as follows. but at the municipal level. guide builders of CIs in a set of technical guidelines about how to design and develop a composite indicator. Gran Canaria and Lanzarote. The measurement of quality of life may be done in different ways. OECD 2008). subjective ones are not in the scope of our measurement techniques unless appropriate surveys exist and could be available. the Handbook on Constructing Composite Indicators. The results obtained are then presented in Sect.1 The Canary Islands conform an archipelago which is one of the seventeen NUTS II of Spain. The next section describes the measurement of quality of life. project launched by OECD (Somarriba 2008. Objective dimensions are most commonly used to study QOL at the individual level. and Fuerteventura. of which NUTS I represent the highest one. Sect. which attempt to capture complex life-satisfaction variables by looking at different dimensions. Along the same lines. It is classiﬁed according to the number of population in the regions of each European country. health facilities or leisure time. 5. It is composed of seven islands: El Hierro. General public often ﬁnd easier to interpret CIs than determinate common factors across many separate indicators (Saltelli 2007). A general objective of most of these indicators is to obtain the ranking of countries or regions according to some aggregated dimensions. in the Communication ‘‘GDP and beyond: Measuring progress in a changing world’’ the Commission outlined its road map with ﬁve key actions to improve the indicators of progress in ways that track how well-off citizens are and incorporate the best new technical and political developments. the interactive database EurLife and the European Quality of Life Survey offers data on living conditions and quality of life in most of the countries of Europe. The present study aims to create a composite indicator of the quality of life for ranking Canary Islands municipalities (NUTS IV and V) . CIs are an aggregate of all variables used and should ideally measure multidimensional aspects that cannot be gauged by single indicators. and how they enjoy these opportunities available to them (Stiglitz and Sen 2009). 2 The Measurement of Quality of Life Unlike GDP. The European division model establishes ﬁve levels. La Palma and Tenerife. Composite Indicators (CIs) are recognized as an useful tool in policy analysis and public communications. Thus. Section 3 describes the dataset. Although mixing both of them results promising. and ﬁnally. to wrong policies. such as socioeconomic condition.A DEA Approach to Measure the Quality-of-Life information to analyze QOL in the European Union. 6 concludes. to the meaning they give to their life. In August 2009. which belong to the province of Las Palmas. The methodology employed to study the quality of life of Canary islands municipalities is described in Sect.
how to weight and aggregate them in a way that the synthetic index could be used as a policy maker tool in which all the dimensions that shape the domains of QOL of each municipality could be analyzed. Our sample is composed of the 87 municipalities in the seven Canary Islands. Based in the components of QOL proposed by the OECD and in the study of Stiglitz and Sen (2009). some non-standard uses of this technique have been proposed in the literature focusing on the properties of DEA as a powerful aggregating tool. As already discussed above. it does not make any sense to include that domain. The empirical use of this methodology may be consulted in Puolamaa et al. DEA was initially developed to measure efﬁciency in production. C. except for the political dimension. unobserved component models (UCM) or data envelopment analysis (DEA). The Handbook on Constructing Composite Indicators revises several weighting and aggregation techniques. the INE is now in the process of data collection. Martın. Mendoza ´ This research is partly based on Gonzalez et al. so that next one is about to be published. the literature contains a large quantity of methods that have been used to weight and aggregate CIs. In this sense. The sample size is large enough to ensure the robustness of the results. the date on which the census was last published. and arranges them into a hierarchic order to compare to each other using a pair wise comparison scheme. C. weights are set in a way that minimise the error in the composite. who built the Index of Environmental Friendliness using this methodology. The weights can provide trade-offs among the indicators. In fact. The second. Most synthetic indexes trust on equal weighting. The result of this process is a set of priorities between the various actions or alternatives. The AHPis a widely used technique in multi-attribute decision making. Our data are referred to 2001. 3 The Data Set In the present study a QOL synthetic indicator that ranks all the Canary Island municipalities is obtained. Weighting and aggregation should be done in a way according to the underlying theoretical framework and data properties. The ﬁrst is the deﬁnition of a set of indicators that collect information on all aspects that inﬂuence QOL. It subdivides a complex decision-making problem into its components. the composite could present an unbalanced structure. DEA is a nonparametric approach that has been used by Hashimoto and Ishikawa (1993) for the QOL evaluation of the 47 prefectures of Japan. In relation to the second problem. if it is wrongly used. provided by the National Statistical Institute (INE) of Spain have been obtained. Using this methodology Kaufmann et al. (2011). representative indicators of all domains described above are obtained. If the interest lies in analyzing different units in the same period of time. which implies that all indicators have equal importance in the composite and therefore.´ J. (1996). Its elaboration takes place every 10 years. In this case. The development of CIs faces two main empirical challenges. the CI is usually based on a set of QOL dimensions that in our production parlance will be represented by bad dimensions–inputs or good dimensions 123 . such as Analytic Hierarchy Process (AHP). Data on living conditions and quality of life of Canarian citizens are also available on the website of the Canarian Institute of Statistics (ISTAC). Unobserved Component Models assume that indicators depend on an unobserved variable and an error term. (1999) aggregated governance indicators. it should ideally give different weights to the indicators. as the level of analysis is the municipality and all municipalities are governed by the same organism and are subject to the same rules. data from the Population and Housing Census. At this territorial level. Although.
gardens. 1) has been taken into account. lack of parks captures the problems of dwellings in relation to the lack of parks. different dimensions are considered that proxy the domains of personal activities. Finally. the outputs are a beneﬁt. etc. The guidance of both OECD and CMEPSP to select the 19 variables that are reasonably close to each domain of QOL (Fig. Personal insecurity is approximated by the variable delinquency and vandalism. It reports about the socio-economic status of citizens. Finally. Positive dimensions are conformed by health facilities. The inputs represent a cost. The former is the ratio between the sum of the total useful surface of the housing and the total of the residents. pollution measures the percentage of houses that notify problems of pollution or bad smells. It measures the percentage of dwellings that notify problems of delinquency or vandalism in the zone. Positive economic aspects are measured by the average socioeconomic condition.. Commuting time. since their reduction makes possible improvements in the results of the composite index of municipalities. Each domain may be approximated by more than one 2 The index is calculated as the ratio of the sum of the class marks of educational level and the total population. environmental conditions. museums. personal activities (which sub-domains of commuting and housing are included in). etc. which include hospital and primary care centers. which encompass senior centers.. social connections.. the last positive factor included in our analysis is the weight of the tertiary sector. post-compulsory education represents the percentage of citizens that completed post-compulsory education. The domains represented are: health. commuting time indicates the average time spent by citizens in their daily trips to their place of study or work. 123 . and insecurity (both personal and economic). As unfavorable factors of living in a municipality. an index variable that ranges from 0 to 3. the unemployment rate is used as a proxy of the domain of economic insecurity.D. environmental conditions. faculties. nursery schools. in relation to the conditions under which households are. It takes into account aspects like the state of the building.5 (Ph. since they affect positively to our measure of quality of life. personal insecurity and economic insecurity. Of the total 19 dimensions. and university studies refers to percentage of people with an university degree. Hence in this study we referred to input variables as unfavorable factors. pensioners club. The class marks range from 0 (illiterate) to 4. and output ones as positive factors. activity and occupational status. By contrast. cultural and sports facilities. composed by primary and secondary schools.A DEA Approach to Measure the Quality-of-Life –outputs. as the percentage of people employed in the sector of services. The average area per occupant and the physical conditions of dwellings are the proxy variables that reﬂect the positive aspects of housing. Education of citizens is composed of three positive factors. It was obtained by combining information from the variables of occupation. running water. etc. and education facilities. The second one is an index that takes values between 0 and 100. lack of parks and bad communications are the variables employed to approximate the domain of personal activities. etc. The average education level. sewage conditions and electricity. three unfavorable variables are included: pollution. sport centers. 11 variables correspond to positive factors and 8 to unfavorable ones. and the number of households that report having poor communications is represented by the variable bad communications. external noises and lack of cleanliness. and lack of cleanliness indicates the percentage of dwellings that report a poor cleanliness in the streets. day care centers. is an index variable created by INE that compute the average acquisition of knowledge by citizens between 30 and 39 years old2. social care facilities. education.). Related to environmental conditions. which incorporate theatres. external noises indicate the percentage of houses that report problems of external noises.
´ J. as political parties seem to lose part of their previous power in favor of the markets. as the territorial units are all subject to the same rules of government. ‘Delinquency and vandalism’ measures personal insecurity. The selection of some variables to proxy this dimension such as participation rates for previous election or other political activities could be done. are measured by ‘commuting time’ for the former. C. ‘post-compulsory education’ and ‘university studies’. Martın. It is out of the scope of this paper to investigate how political voice or governance could be incorporated in the analysis of QOL. there is a great difference between the minimum and maximum values of almost all the variables. ‘external noises’. the less weight of other sectors will be. C. Table 1 shows the descriptive statistics for the positive and unfavorable factors in our model. It is assumed that the greater the weight of the service sector in economic activity of the municipalities is. However this could be a promising line of research for the future due to the special events we are observing in the EU after the ﬁnancial crisis. Personal activities domain is represented by the variables ‘lack of parks’ and ‘bad communications’. Garafıa. The municipalities of Vallehermoso. Therefore. Betancuria and Artenara do not present any health facilities. Arico. ´ Alajero. ‘lack of cleanliness’ and indirectly by ‘weight of the tertiary sector’. Education is accounted for by the variables ‘education facilities’. As it can be seen. Environmental conditions is represented by ‘pollution’. and by ‘average area per occupant’ and ‘physical conditions of dwellings’ for the last. Economic insecurity is covered by ‘unemployment rate’ and ‘socioeconomiccondition’. less ecological pressure on the environment will be exerted. Mendoza Healthfacilities Social carefacilities Personal Deliquency and vandalism Health Education facilities Average Education Level Postcompulsory education Universitystudies Insecurity Unemployment rate Socio-economic condition Education Housing Economic Environmental conditions Pollution Accoustic Pollution Lack of cleanliness Weight of tertiary sector Quality of Life Lack of parks Badcommunications Personal activities Average area per occupant Physical conditions of dwellings Commuting time e Social connections and governance Commuting Cutural and sportfacilities Fig. 1 Domains and variables used to measure quality of life variable. especially the industry. political voice is not included in our model. However. Vilaﬂor 123 . The variables ‘health facilities’ and ‘social care facilities’ are proxies for health. ‘average education level’. ‘Cultural and sports facilities’ indirectly approximates the domain of social connections. Commuting time and housing. As mentioned above. sub-domains of personal activities. Municipal facilities present large differences between ´ their minimum and maximum values.
08 7.03 0. ˜ Fasnia. ´ ´ Arico. San Miguel de Abona.55 0.28 13.97 13.00 0. Garafıa.80 Puntagorda 76. Arico.59 0.00 Puntagorda Puntagorda Artenara Artenara Puntagorda 65.45 El Tanque Puntagorda La Victoria de Acentejo Tazacorte 0.57 37.43 16.34 11. Fasnia.18 0.98 7. ´ Arico.A DEA Approach to Measure the Quality-of-Life Table 1 Descriptive statistics Mean Positive factors Health facilities (HEALTH) Social care facilities (SOCIAL) Education facilities (EDUC) Cultural and sports facilities (CULT) Average education level (AEL) Post-compulsory education (POST) University studies (UNIV) Socio-economic condition (ASC) Weight of tertiary sector (TERT) Average area per occupant (AREA) Physical conditions of dwellings (LIVCOND) Unfavorable factors Lack of cleanliness (DIRT) Lack of parks (GREEN) External noises (NOISE) Pollution (POLLUT) Delinquency and vandalism (CRIME) Unemployment rate (UNEMP) 27.82 45.78 47.15 8.05 0. ´ ˜ Garafıa. Garafıa.00 ´ Vallehermoso. La Guancha.00 97.01 0.29 80.14 0. San Juan de la Rambla.16 ´ Pajara 36. Betancuria and Artenara ´ Vilafor.73 8. Mogan and Artenara Vallehermoso.03 32.00 0.26 9.62 ´ Santa Brıgida ´ Pajara Puerto de La Cruz ´ Harıa 58.41 49.12 85. ´ Alajero.73 0. Barlovento.86 51.08 48.98 3.14 41.05 14.22 1.89 0.90 4.01 11.34 Vega de San Mateo Betancuria Santa Cruz de Tenerife Santa Cruz de Tenerife Santa Cruz de Tenerife Puntagorda 12. Tijarafe.30 ´ Santa Brıgida ´ Santa Brıgida 0.90 68.80 Vilaﬂor Yaiza SD Min Municipality Max Municipality 11.98 54.64 2.95 14.70 5.81 ˜ Brena Alta 15. San ´ Sebastian.68 5. Arico and ´ Alajero Vilaﬂor.95 ´ Harıa 2.09 0.25 123 . Fasnia. Barlovento.00 19.39 2.66 49. Alajero. Brena Baja.79 11.02 0.61 Yaiza 10. Alajero and Antigua El Tanque Yaiza 116.18 0.86 0.67 24.03 19.62 33.70 14. Brena Alta. Frontera. Brena ˜ Baja.00 81.
DEA has progressed throughout a variety of formulations and uses to other kind of industries.3 3 DEA can be applied to scenarios where the data cannot be strictly interpreted as inputs or outputs or there is no direct functional relationship between the variables. The same happens to educational.87 Min 1. deﬁne the DEA methodology as a ‘‘mathematical programming model applied to observed data that provides a new way of obtaining empirical estimates of extremal relationships such as the production functions and/or efﬁciency production possibility surfaces that are the cornerstones of modern economics’’. in turn. Socio-economic condition and physical conditions of dwellings present the lowest values. which present some municipalities with no such facilities.33 12.74 Puntagorda 58. which use multiple inputs to produce multiple outputs. it has the lowest value at commuting time. it is necessary to assign correctly the weights to the variables that ﬁnally will inﬂuence the composite index.92 7. health care. Since then. DEA is an intuitive method to look at. while outputs are those variables for which higher amounts are better. but presents very good conditions with some of the lowest values in some unfavorable factors. agriculture. A municipality that requires special attention is Puntagorda. the municipality is considered to be the cleanest. although other small municipalities have more than 49 facilities for ten ´ thousand inhabitants. 123 . Originally designed to evaluate decision making units (DMUs). banking. transportation. However.63 Tejeda Source: Own elaboration shows 116.90 Municipality ´ Pajara 24. sports. C. armed forces. and delinquency and vandalism. This municipality also shows the highest unemployment rate and. Charnes et al. In such situations. Santa Cruz de Tenerife shows the highest values in relation to the problems of dwellings in external noises. safest and the one with more green areas by its inhabitants. Mendoza Table 1 continued Mean Bad communications (COM) Commuting time (TIME) 18. (1978).41 health facilities for ten thousand inhabitants. On the other hand. delinquency and vandalism. pollution. post-compulsory education and university studies. cultural and sports and social care facilities. C. without a clear identiﬁcation of the relation between them. This municipality presents the highest values at average education level. lack of parks. Because of these disparities. Santa Brıgida is highlighted for the level of studies of its inhabitants. as it can be seen for the values of lack of cleanliness.´ J. a general guideline to the classiﬁcation of the variables is that variables for which lower levels are better are considered inputs. given the nature of the attributes used to measure the quality of life of municipalities and its multidimensionality.57 SD 10. as it presents the lowest values at external noises and pollution. Martın. 4 Methodology In this paper. Puntagorda suffers from deﬁciencies in two positive factors and in the unemployment rate.89 Municipality Valle Gran Rey Max 48. numerous applications employing the DEA methodology have been presented involving a wide variety of contexts: education. Artenara is the most quiet and less polluted municipality. retail stores and electricity suppliers.
invariance of units. constant returns to scale (CRS) and additive model. The city o is dominated in terms of positive factors if at least one linear combination of cities shows that some positive factor can be increased without worsening off the rest of unfavorable and positive factors. 2011). As discussed therein. 1978 and Banker et al. CRS or extensions of these basic models. The oth production unit can now be described more compactly with the vector (Xo. This knowledge is going to determine the envelopment surface –constant return to scale CRS or variable return to scale VRS4 of the model. The acronyms come from the initial of the authors of the papers that employed these two different envelopment surfaces (Charnes et al. and efﬁciency measurement. i. a model can be described by the envelopment surface. An input orientation focuses on proportional decrease of the input vector. Ali and Seiford (1993). The data set has to describe the activities of the units in the better possible way. DEA consider the dominance of the linear combinations of the n cities ÀP Á P considered in the analysis. Gonzalez et al. There are three basic orientations: input. Zhu 2001. (2000). Speciﬁcally. In DEA analysis. (1994).. There are three basic DEA models: variable returns to scale (VRS). It is especially important to have some idea about the hypothetical returns to scale that can exist. 5 123 . k kk Yk . with the scalar restricted to be nonnegative.Yo).e. and are deemed efﬁcient. such as city and nation performance (Charnes et al. orientation of the model. Some DEA applications are in the area of socioeconomic performance. The units that do not lie on the frontier are inefﬁcient and the measurement of the grade of inefﬁciency is determined by the selection of the model. 1989. which denote. we consider the dominance comparisons for this particular city using the data set as a reference. if at least one linear combination of cities shows that some of these ones can be decreased without worsening off the rest of unfavorable or positive factors. The different assumptions about the scalar produce distinct envelopment surfaces: VRS. It can be seen that DEA is particularly appropriate when information on how to weight multiple factors is not clear or even unknown. A good introduction to DEA notation. it is generally assumed that there are n production units to be evaluated— in our case cities or municipalities. in terms of unfavorable factors. 1984). researchers then usually face how to select an orientation of the model to determine the measurement of the efﬁciency. using amounts of m different inputs (unfavorable factors) to produce quantities of s different outputs (positive factors). the oth production unit consumes xio units of input i (i = 1 to m) and produces yro units of output r (r = 1 to s). DMUs. the vectors of favorable and positive factors for the city o. We do not intend to cover the basic aspects of DEA models. k kk Xk . involved in the study. After the selection of envelopment surface. Coelli et al. (1998) and Cooper et al. The choice of a DEA model depends on some assumptions regarding the data set to be used and in some prior knowledge about the issue under analysis.A DEA Approach to Measure the Quality-of-Life The ability of DEA to model multidimensional relationships among multiple inputs and multiple outputs without considering a basic functional form assumption makes DEA very popular within a wide variety of areas. Sueyoshi ´ 1992. Next. do determine the selection of the orientation. the output orientation adjusts the proportional increase of the output vector and the equal orientation do not discriminate the importance or the possible increase of output or decrease of input. 4 CCR and BCC acronyms are sometimes used in reference to CRS and VRS models. respectively. Golany and Thore 1997.5 The city o is dominated. These can be used to seek which ones of the n DMUs determine the frontier of the envelopment surface. formulation and geometric interpretation can be consulted in Charnes et al. output and equal.
The method also serves to calculate the level of inefﬁciency of a given inefﬁcient city. such as improving the environmental conditions and reducing the personal insecurity of the citizens. / C 0) is also a solution to the problem (Coelli 1996). The solution to this minimization problem is not unique. and thus they recommended the 123 . vo free r¼1 r¼1 lr yro ð1Þ lr yrj The set of constraints requires that the same weights. given the constraints and DEA. . Thus. nÞ where vi . C. As a result. nÞ ð2Þ where vi . when applied to all the cities. . these various attributes are integrated and balanced by DEA-based measures. the multiplier-DEA VRS output efﬁciency for the city o is calculated through the following linear programming problem: Pm v x þvo i¼1 i io min Ps vl s:t:m P i¼1 Ps vi xij þvo ! 1 ðj ¼ 1. In this sense. instead of (subjectively) combining each single attribute ratio between unfavorable and positive factors. Since. then there exist an inﬁnite number of solutions because ((/v. vo free P A city is in the frontier if and only if s vi xio þ v ¼ 1 in optimality. See Seiford and Thrall (1990) for a detailed discussion of these models. each city will choose weights so as to minimize self-efﬁciency. In the current study. Martın. provides a single virtual ratio. The efﬁciency ratio ranges from 1 to inﬁnity. do not provide any city with efﬁciency lower than one. . Doyle and Green (1994) validated this method. lr ! 0.. respectively. . saying that decision makers do not always have a reasonable prior knowledge from which to estimate assurance regions for multipliers. weighting individual factor by optimal multipliers. . the following problem is resolved for each city: min s:t: m P i¼1 s P r¼1 m P vl i¼1 vi xio þ vo s P r¼1 vi xij þ vo À lr yro ¼ 1 lr yrj ! 0 ðj ¼ 1. l) to the above problem. the method serves to split up a set of cities into two subsets: efﬁcient and inefﬁcient cities. Mendoza Thus. C.. It can be shown that if there exists a solution (v.1 Cross-Efﬁciency DEA Model Sexton et al. and the weighted input and output are called virtual input and virtual output. /l). (1986) were the ﬁrst to develop the cross-efﬁciency evaluation matrix. lr ! 0. 4. The constraint i¼1 Ps r¼1 lr yro ¼ 1 is known as a normalization constraint. there are an inﬁnite number of solutions for the dual variables (multipliers). . We ﬁrst analyze a VRS-DEA output orientation model to measure the QOL. Majors and policy makers of a municipality can affect the quality of life of citizens using different planning strategies. multiple attributes related to the QOL are considered in forms of DEA inputs/outputs.´ J. Formally. initiating the subject of ranking in DEA. it is necessary to formulate an equivalent linear programming program which avoids this problem.
such as. all the cities evaluate unit j as efﬁcient. In order to rank the units. The minimum value of cross-efﬁciency is 1.e.g. (2) a crossefﬁciency ranking method is utilized to identify a city’s QOL status in which the set of multiple efﬁcient cities is reduced determining better QOL scores. since the evaluation subsequently loses its connection to the multiplier weights (Adler et al. There are different synthetic indexes that can be used to rank the performance of the cities. we can simply assign the city with the lowest score a rank of one and the unit with the highest score a rank of n. i.A DEA Approach to Measure the Quality-of-Life cross-efﬁciency evaluation matrix for ranking units. meanwhile only includes the virtual multipliers of the city that is being evaluated. Note that all the elements in the matrix are in the range one to inﬁnity. using the virtual multipliers obtained in each of the n linear programming programs resolved before. since each element uses " different weights. a DMU could be considered aggressive if it minimizes self-efﬁciency and at a secondary level maximizes the other DMUs crossefﬁciency scores. k¼1 n However. median.. The discussion is carried out via four studies: (1) a VRS-DEA output model is proposed to calculate inefﬁciency represented by the values obtained as the QOL score and the cities that lie in the frontier and can be considered the ones where QOL is optimal. hkj represents the score given to city j in the DEA run of city k. Furthermore. all the cities are evaluated with the same set of weight vectors. j ¼ 1. . The cross-efﬁciency evaluation method simply calculates the efﬁcient score for each city n times. this feature is also one of the principal drawbacks of this method. 5 Results This section shows how DEA models [e. i. The benevolent secondary objective would be able to equally minimize all DMUs cross-efﬁciency scores. we P " will use the average cross-efﬁciency score given to city j deﬁned as: hj ¼ 1 n hkj . In this context.e. While DEA scores hjj are non-comparable. The results of all the DEA cross-efﬁciency scores can be summarized in a cross-efﬁciency matrix as following: Pm i¼1 vik xij þ vk . the performance of city j is evaluated using the weights obtained for city k. according to a conventional DEA methodology). (3) factors will be 123 . 2002). In this paper. The cross-efﬁciency ranking method in this DEA context uses the results of the crossefﬁciency matrix hkj in order to rank all Canaries municipalities. hj score can be used in comparisons because it utilizes the weights of all the units.nÞ ð3Þ hkj ¼ Ps r¼1 lrk yrj Thus. (1986) established a set of secondary goals for either aggressive or benevolent DMUs.. Sexton et al. These measures represent the performance of cities better than the standard DEA efﬁciency score hjj . hkk . . There are other standard univariate summaries. . This is based on the fact that all the elements of the cross-efﬁciency matrix have been considered so all virtual multipliers are important in order to obtain a synthetic measure of performance. . averages are not the only possibility. . and the elements in the diagonal... which occurs when city j is efﬁcient in all the runs. variance or some other quantile point that could also be applied. models (2) and (3)] can be employed and analyzed to characterize the QOL across the municipalities of the Canary Islands. However. ðk ¼ 1. n. represent the standard DEA efﬁciency score (the elements in the diagonal are equal 1 for efﬁcient cities and greater than 1 for inefﬁcient ones.
we may incorporate some weight restrictions. as well as.22. Puntallana and Agulo). The city that presents the worst QOL score is ‘‘La Victoria de Acentejo’’ with a value of 1. Martın. For example. Teguise and Haria). C. given the data observed and the structure of the model employed.g. For municipalities that lie in the frontier. In turn. other frontier municipalities do not excel in any dimension but have a good balance between drawbacks and advantages (e. To increase the information provided by our ﬁrst attempt and achieve a higher degree of congruence or consensus in the optimal multipliers employed in the evaluation of QOL. Another interesting characteristic is that now the two champion performers are Puntallana and Agulo. 123 . This is a necessary step to know which municipalities are located on the frontier and to calculate the optimal multipliers that will be used in the subsequent step. However. It can also be seen that there are signiﬁcant changes in the region of the worst QOL performers. two municipalities located in the province of Tenerife and both of them were considered QOL efﬁcient. However. so they cannot make any (relative) improvement. Unfortunately. this municipality should improve (at least) by 22 per cent. The VRS-DEA output model was run to obtain an initial best practice frontier. C. as well as two other characteristics that have been highlighted by Zhu (2001): ﬁrstly the excessive number of unfavorable and positive factors. However this type of methods requires additional explicit information on tradeoffs among inputs and outputs elicited from expertise of policy makers. the current study does not have access to this type of information.´ J. It is clear that this model is an adequate method to measure the QOL score for each municipality and that its ranking power is maximum.ratios or assurance regions (Charnes et al. (4) a method is proposed to obtain adequate multipliers for each of the factors to obtain QOL for the region and each of the islands. This model reﬂects the natural structure of municipalities in the Canary Islands. the inefﬁciencies are not very signiﬁcant because in most of the cases is lower than twenty percent. This city is located in the island of Tenerife. Some of them belong to the frontier because they are excellent places to live in many or all the dimensions considered (e. the QOL score attained is equal to 1. The results of the X-DEA (Table 3) show a dramatic reduction in the number of municipalities that can now be considered QOL efﬁcient –no municipality can be considered to lie on the frontier. Mendoza analyzed for some cities in order to identify critical benchmarks that can be object of future policy planning in order to improve the performance. the percentage of the most important attributes–critical factors. such as cone.g. some other municipalities are considered efﬁcient because they excel in some dimension although they present low marks in others and. It can be seen that there are 46 municipalities out of 87 that can be considered efﬁcient. This result shows that the discrimination power of this method is quite limited and that a further reﬁnement is needed. Therefore. Numerous methods have been proposed to reduce the number of frontier DMUs if this is seen as necessary. therefore. so each city under evaluation can choose a proper strategy to improve its performance. To better perform in the future. and secondly the weight ﬂexibility in model (2). 1989). the QOL score should be analyzed with the X-DEA model. Table 2 shows the ﬁrst attempt to measure the QOL score for all the efﬁcient cities and the ten worst performers. we propose X-DEA as a valid model to overcome the aforementioned limitations of VRSDEA. Looking at the results of the ten worst cities it is highlighted that most of the cities are located in the province of Tenerife and that Telde is the only municipality that is located in the province of Las Palmas. the current study develops a model based on X-DEA as an alternative way to implicitly express the tradeoff information and further reduce the number of frontier QOL cities.
00 1.A DEA Approach to Measure the Quality-of-Life Table 2 City VRS-DEA results to measure QOL QOL score City QOL score City QOL score City QOL score Efﬁcient cities 38004-Arafo 38047-Tijarafe 38046-Tegueste 1.13 ´ 38019-Guıa de Isora 38031Realejos (Los) 1.00 ´ 38016-Garafıa 38044-Tanque (El) 38042-Silos (Los) 35007Betancuria 38027-Paso (El) 1.00 1. They present very high ﬁgures that are consequence of dividing virtual input by very small virtual output—multipliers that are equal to zero and factors near zero for those factors different from zero.10 1.00 1.00 1. the two worst performers are Artenara and Betancuria.00 1.00 1.00 1.00 1.00 1.00 ˜ 38009-Brena Baja 38010Buenavista del Norte 35020-San ´ Nicolas de Tolentino 38017-Granadilla de Abona 38022-Icod de los Vinos 35026-Telde 1.00 1.00 35024-Teguise 38049-Valle Gran Rey ´ 35010-Harıa 1.00 1.00 38035-San Miguel de Abona 35021-Santa ´ Brıgida 38032-Rosario (El) 1.00 1.00 1.00 ´ 35015-Pajara 38037-Santa Cruz de la Palma 38004-Arafo 1.13 1.14 1.00 1.15 38034-San Juan de la Rambla 38051-Victoria de Acentejo (La) 1.00 1.00 1.14 Efﬁcient and the ten worst cities Source: Own elaboration On the other side.00 1.00 1.22 1.00 1.00 35032Valleseco 35034-Yaiza 1. 123 .00 1.00 1.00 1.00 10 worst cities 38018-Guancha (La) 38050Vallehermoso 38026-Orotava (La) 1.00 38007-Barlovento 1.10 1.00 1.00 1.00 38038-Santa Cruz de Tenerife 38028-Puerto de la Cruz 38033-San ´ Andres y Sauces ˜ 38008-Brena Alta 35019-San ´ Bartolome de Tirajana 38014Fuencaliente de la Palma ´ 35028-Tıas 38053-Villa de Mazo 38030-Puntallana 1.00 1.00 35005Artenara 38001-Adeje 35018-San ´ Bartolome 38048Valverde 38003´ Alajero 35033-Vega de San Mateo 35025-Tejeda 38040Santiago del Teide 35008-Firgas 1.00 1.00 1.00 1.00 38052-Vilaﬂor 35029-Tinajo 1.00 1.19 1.12 1.00 1.00 38029Puntagorda 38013-Frontera 38002-Agulo 1.00 1.00 1.00 1.00 1.
96 20.050.24 1.690. Betancuria 6 Marks are obtained for each of the factors as follows: A.52 4.537. Finally.14 38015Garachico 38027-Paso (El) 38029Puntagorda 35029-Tinajo 38053-Villa de Mazo 38004-Arafo 35032Valleseco 38049-Valle Gran Rey 38037-Santa Cruz de la Palma 38047Tijarafe 1.44 4.40 8. and it can be seen that presents a very bad performance in unemployment and commuting time.821. 3 Bs—health.10 1.928.48 35026-Telde 38032Rosario (El) 35012´ Mogan 38007Barlovento 38013Frontera 38035-San Miguel de Abona 38052Vilaﬂor 2. 123 . Santa ´ ´ Marıa de Guıa belongs to the third quartile—position 36.95 21.29 1.50 1.44 1. The last two municipalities have the peculiarity of being the best and worst QOL municipalities in the Canary Islands. it presents a good performance in social and living conditions. However. area and tertiary. C. Mendoza Table 3 City X-DEA results to measure QOL QOL score City QOL score City QOL score City QOL score Best QOL cities 38030Puntallana 38002-Agulo 38014Fuencaliente de la Palma 35034-Yaiza 35024-Teguise 1. third and fourth quartile.57 4. the best municipality in Canary Islands show a list of marks with no Ds. On the other hand.28 1.48 Worst QOL Cities 35030Tuineje 35018-San ´ Bartolome 35008-Firgas 2. average socioeconomic conditions and tertiary.62 2.35 18.12 7.849. second. We show the results for three different municipalities: Santa Marıa de Guıa de Gran Canaria.81 35005-Artenara 22.041. Puntallana.43 1.027.01 9.50 1.791.48 1. Puntallana and Betancuria.92 35007Betancuria 23.126.91 38048Valverde ´ 35010-Harıa 38033-San ´ Andres y Sauces 38001-Adeje 1. C.´ J.18 Best and Worst QOL cities Source: Own elaboration Table 4 shows the marks6 for a small sample of municipalities that can be used as a tool for benchmarking and whose value resides in the opportunity that is given to policy makers in order to design a strategy for improving the performance of their respective ´ ´ municipality.277.51 1. It can be highlighted that Puntallana is not the ﬁrst municipality in any factor but it can be seen in the list that presents a highly balanced sheet of marks.15 1.27 1. C and D are given if the value belongs to the ﬁrst. 3 Cs—living conditions.38 1.56 5. and 13 As.54 4.889.91 10. respectively.51 2. B.10 1.70 ˜ 38009-Brena Baja 38012-Fasnia ˜ 38008-Brena Alta 35003-Antigua 38050Vallehermoso ´ 38003-Alajero 38005-Arico ´ 38016-Garafıa 7. Martın.27 1.36 1.28 35013-Moya 1.843.761.84 3.
14 37 POLLUT 10.41 49.848 36 123 VRS 1.84 12 LIVCOND 63.52 24.60 17.00 77 13 A 30.99 6.23 0.81 47.8 76.82 59 GREEN 39.Table 4 38030-Puntallana Value 5.76 47 EDUC 12.48 48 Social 15.00 83 78 41 2 29 64 74 42 27 87 42 12 A 14.60 17 20 A 0.08 45 TERT 64.02 16 AREA 32.00 29 B 0.02 27 COM 22.31 80 A DEA Approach to Measure the Quality-of-Life Positive CULT 5.85 39.13 64 Summary Cross 1.76 43.11 31 DIRT 19.12 12.59 23 B 8 A 80.26 14.98 54.58 0.09 72.24 25 HEALTH 6.16 12.18 11 A 7.73 Artenara Artenara Puntagorda Valle Gran Rey Puntagorda Puntagorda ´ Pajara Puntagorda ´ Harıa Yaiza Vilaﬂor Position Mark Value Position Mark Value Municipality 35007-Betancuria Best values Individual analysis of factors for benchmarking Factors Mark B B B C B B D D C B C A A B C B B C C C C ´ ´ 35023-Santa Marıa de Guıa de Gran Canaria Unfavorable Value Position NOISE 17.55 9 A 13.78 1.22 85.18 1.00 12 A 15.62 1.49 6.51 57.70 29 Yaiza ˜ Brena Ala ´ Harıa ASC 0.62 69 TIME 33.00 2 A 0.81 0.79 23537.61 116.3 0.40 37 UNENP 18.87 31 CRIME 7.89 12.12 2.83 75 D D A D D B A B C D B B D B 36 B 14.60 8.94 40 B 1.84 38.92 2.85 62 AEL 2.93 41 B 3 A 3.12 64.69 26 POST 38.18 13 A 9.74 81.62 30.52 1.08 87 D 0 5.47 0.23 28 ´ Pajara ´ Santa Brıgida ´ Santa Brıgida ´ Santa Brıgida Puerto de La Cruz Puntallana Arafo UNIV 0.89 0.95 97.57 17 A 0.10 1.10 1.15 18 A 0.84 17.74 0.16 26 B 0.030 59 .95 2.00 1 22 57 15 20 A A C A B 7 A 24 B 51 C 54 C 58.01 4.
279 3.12 6.55 Lanzarote Tenerife La Palma La Gomera El Hierro 0.58 2.65 2.15 6.08 2.72 5.33 EDUC 0.09 0.44 7.91 0.20 3.47 SOCIAL 0.76 1.26 7.02 1.92 8.76 0.173 6.52 3.90 Table 5 Multipliers/shadow prices for X-DEA QOL Factor Multiplier Percentage of participation Archipelago Gran Canaria NOISE 0.81 0.63 8.33 0.73 4.43 0.22 9.40 4.84 8.25 0.42 11.00 0. Martın.324 5.47 7.88 6.82 6.18 ASC 7.68 3.96 0.21 COM 0.40 3.58 8.55 0. Mendoza TERT 0.100 7.73 3.94 0.78 1.46 4.40 9.91 7.00 0.80 1.50 3.63 POST 0.36 0.12 3.62 0.093 0.45 3.60 0.69 6.11 0.03 POLLUT 0.98 .69 4.09 6.25 9.11 0.017 0.06 4.243 6.42 3.93 1.62 0.83 3.08 0.42 5.54 9.43 0.10 7.03 6.846 6.81 1.61 UNIV 17.62 5.337 9.20 0.01 6.99 1.45 3.52 0.26 3.69 9.70 1.82 UNENP 0.94 3.89 2.80 AREA 0.05 10.07 HEALTH 0.154 1.81 0.16 6.95 1.57 9.46 4.62 0.54 8.55 0.34 0.04 5.60 0.13 5.03 7.46 5.06 0.84 CULT 0.71 3.19 0.316 4.62 0.92 0.45 5.42 0.00 6.77 3.95 ´ J.498 5.25 8.96 DIRT 0.03 AEL 6.57 GREEN 0.71 6.75 4.669 0.78 7.48 6.24 0.13 0.07 1.52 4.47 0. C.71 3.81 3.125 0.90 3.44 0.56 1.732 8.70 4.08 1.06 8.47 0.52 1.22 LIVCOND 0.80 0.070 0.45 8.37 9.31 CRIME 0.123 Fuerteventura 0. C.97 TIME 0.08 0.01 5.31 10.062 0.231 3.115 2.05 1.29 10.05 0.
one could use other alternative approaches such as the super-efﬁciency DEA models or the virtual efﬁciency model to obtain a rank for a set of cities. It was shown that average multipliers obtained in each run of VRS-DEA model can be used to identify critical QOL factors for a given city. policy makers should concentrate their policies in improving these dimensions in order to provide a better QOL to their citizens. It can be seen that the most important factors for the overall performance of the archipelago are by order the following ones: living conditions. In the table. A model based on X-DEA was used to better approximate the multidimensionality of QOL determining a synthetic index to measure indistinctly practical comfort for living in the municipalities of the Canary Islands. which is a particular case of benchmarking DEA. Such new information is important in designing a good strategy to improve the performance on QOL. Acknowledgments The authors thank Eduardo Gonzalez. commuting time. Some previous papers have ranked the performance on QOL using different approaches like benchmarking DEA and Value Efﬁciency Analysis (VEA). professor of the Department of Business Administration at the University of Oviedo for providing most of the data used in this research. It is remarkable that all the factors belong to the category of positive ones. cultural and sport facilities. average educational level and unemployment. health facilities. commuting time. Thus.A DEA Approach to Measure the Quality-of-Life is the other side of the coin. the meaning of such rankings needs to be carefully examined and compared with our proposal but it is beyond the scope of the present study. To our knowledge this is the ﬁrst time that X-DEA model is used to analyze the QOL of cities. Table 5 shows the values of multipliers for X-DEA QOL model and it can be seen that the highest values are observed in the following factors: average socioeconomic conditions. it is well known that the problem possesses a multidimensional nature and that there is always a huge controversy when a group of experts come up with a list of a small number of cities. 123 . The last two columns of the table show the value and the municipality which presents the best performance for each of the factors under analysis. one is able to develop a multidimensional QOL measure without a priori knowledge of factor relationships. However. social facilities and post compulsory education. Additional gratitude extends to Professor Alex Michalos and two anonymous referees for their valuable comments. as well as the often unknown relationships among various QOL factors. From our experience in other related areas. as consequence of the multidimensional nature. It is obvious that there is large panoply of methods to develop measures designed to balance numerous factors that contribute to the QOL. average education level and university population. the percentage of these scores is accrued to each of the factors per island and for the whole archipelago. 6 Concluding Remarks In measuring the QOL of cities. The current paper showed that by using DEA. It is evident that these unitary values need to be multiplied by each of the factors that are part of the analysis. It has to seriously improve the performance on the six factors where it fails—green areas. The usual disclaimer applies. Our intention here is to provide indepth information on how to improve the QOL while offering an alternative perspective on how to measure QOL.
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