Global Statistics - Composite Indices for International Comparisons

Go to Course: https://www.coursera.org/learn/global-statistics

Introduction

### Course Review: Global Statistics - Composite Indices for International Comparisons #### Overview Coursera’s course, “Global Statistics - Composite Indices for International Comparisons,” offers an insightful deep dive into the burgeoning field of composite indices (CIs). As globalization accelerates, the importance of accurately measuring and understanding complex data has never been more critical. However, the instructional resources surrounding the construction and interpretation of CIs have not kept pace with the rapid evolution of quantitative methodologies. This course aims to bridge that gap, providing essential knowledge for those engaged in international debates surrounding policy and governance, making it a must-have for professionals across various sectors, including NGOs, journalism, politics, and academia. #### Course Structure and Content The course is structured into several well-defined modules, each focusing on different aspects of composite indices: 1. **Welcome Module**: - The course kicks off with an introduction to the professors and an overview of CIs. This module lays the foundation by explaining the significance of composite indices in various fields and outlining the course's weekly content. 2. **Some Introductory Issues**: - Divided into four lessons, this module covers the definition of CIs, their historical development, and the criteria for constructing high-quality indices. The discussions on the pros and cons of CIs are especially valuable, as they provide a balanced view of the subject matter. 3. **The Steps of Constructing a Composite Index**: - This module is practical and instructional, guiding through theoretical frameworks, variable selection, data issues, weight choice, and robustness assessment. It helps learners understand the intricacies of data manipulation and statistical techniques that are fundamental to creating meaningful composite indices. 4. **Globalization and Youth Labor Market Indices (ETH Zurich/KOF)**: - Participants explore specific indices like the Young Labor Market Index and the KOF Globalization Index. This module is particularly beneficial for those interested in labor statistics and globalization trends, providing hands-on analysis tools. 5. **Export Potential Assessment (ITC)**: - Focused on indices related to trade, this module introduces the Export Potential Index and the Product Diversification Index. There is a clear emphasis on real-world applications, crucial for trade advisers and policymakers looking to optimize export strategies. 6. **Liner Shipping Connectivity Indices (UNCTAD) and Human Development Index (UNDP)**: - The final module covers the Liner Shipping Connectivity Index and the Human Development Index, including their methodologies and implications. The practical examples and historical context provided in this section enhance understanding and highlight the importance of data awareness. #### Learning Outcomes By the end of the course, learners will have gained significant expertise in several areas: - A comprehensive understanding of what composite indices are, their necessity, and their applications. - Practical knowledge of the steps involved in constructing an index, including data selection and the critical role of weights. - Analytical skills to assess the robustness and validity of composite indices. - The ability to critically evaluate significant indices used in various sectors, from trade to social development. #### Recommendation “Global Statistics - Composite Indices for International Comparisons” is highly recommended for anyone involved in policy-making, statistical analysis, or research. Its structured approach, detailed modules, and real-world applications make it an invaluable resource for professionals aiming to enhance their understanding of global data representation. Whether you are a student, a researcher, or a working professional looking to upskill, this course equips you with the essential tools to navigate and interpret complex datasets in an increasingly interconnected world. Take the leap to bolster your understanding of composite indices; enroll in this course today on Coursera!

Syllabus

Welcome module

Welcome to the first module of this course. In this welcome module, you will be introduced with the Professors that will take part in this course on composites indices. We explain the rationale for composite indices (CIs) and show how they can be of interest. This course is open to NGO members, politicians, journalists, students and all persons interested in understanding, creating and/or interpreting CIs. By the end of this first module, you will have an overview of the content of the course week by week.

This module contains four lessons. The first lesson is an introduction to CIs. It defines what a CI is, introduces their mathematical notation and reviews some core historical aspects of their development, the need and use of CIs. The second lesson focuses on the demand for CIs while the third lesson develops a qualitative framework for the construction of CIs. More specifically, the intrinsic quality of CIs is discussed by reviewing their pros and cons. Finally, the last lesson of this introductory module sketches the steps involved in the construction of a CI. Learning outcomes: by the end of this module you will have a clear idea what a CI is (definition, ingredients, history, objective), know why it is needed and where it is used (needs and demand), be familiar with the quality requirements and have a first idea steps involved in the construction of a CI.

This module is organized along four lessons. The objective of this module is to familiarize you with the key steps to undertake when constructing a CI. The first lesson will develop a theoretical framework to support CIs’ construction. Notably, it will cover topics such as variables selection and data issues. The second lesson will introduce a unifying approach to construct CI by discussing aspects related to transformation functions and the elasticity of substitution. The entire third lesson will be devoted to an essential aspect in the construction of a CI: the choice of weights. Finally, the module will conclude by addressing questions arising after the construction of a CI. For instance, lesson four will discuss how to assess the robustness of the resulting CI. By the end of this module you will be familiar with all the most important technical (or say statistical) steps involved in constructing CIs.

In this module, you will discover two popular indices developed by ETH Zurich: the Young Labour Market Index and the KOF Globalization index. In the first lesson of this week, you will learn more about the Youth Labour Market Index (YLMI). The KOF YLMI captures various aspects of the youth labour market situation of countries across the world. You will learn which indicators are included in the KOF YLMI and how these are aggregated into a single index. Furthermore, you will get to know an online tool that invites you to analyse the youth labour market situation yourself. In the second lesson of this module, you will learn about the KOF Globalization Index which is a widely used composite indicator that measures the degree of globalization for every country in the world since 1970. It distinguishes between three dimensions of globalization: Economic, social and political globalization. In the following module, you will learn why it is important to measure globalization and what the different stages in constructing the KOF Globalization Index are. A critical discussion of the Index sums up the module.

This module focuses on trade indices developed by the International Trade Centre, the Export Potential Index (EDI) and the Product Diversification index (PDI). Frictions often create a gap between what a country could export and what it does export to markets around the world. Trade advisers could better address these frictions and help firms realize greater exports if they knew exactly which products and markets offer best chances. During this week, you will learn about the Export Potential Assessment (EPI and PDI), which indicates products, sectors and markets for trade development activities for over 200 countries and 4,000 products. Based upon an assessment of the exporting country’s supply capacity, the target market’s demand and tariff conditions as well as the bilateral links between the exporting country and the target market, it provides a ranking of untapped opportunities.

During this week you will be exploring two indices. The first index, the Liner Shipping (Bilateral) Connectivity Index (LSCI/LSBCI) computed each year by UNCTAD since 2004. It provides an overall indicator of a country maritime connectivity related to liner shipping. Throughout this lesson, we give some insights on why the LSCI and LSBCI were developed. We also cover the methodology to build both indices. We then discuss some stylized facts. The second index presented this week is the Human Development Index (HDI) developed by UNDP. During this lesson, you will be slightly introduced with the history of the HDI. We explain the steps of constructing the HDI, i.e. choosing the three dimensions (health, education and living conditions) composing the HDI and their respective indicators, normalizing the indicators and aggregating the indicators and dimensional sub-indices using different methods. Then, we use a practical example to calculate the HDI for one country. At the end, we discuss some limitations of the HDI and give some elements for future improvement.