The economic vulnerability index : some conceptual and methodological issues

Abstract

It IS increasingly being realised that policy and decision-making require indices to succinctly summarise tendencies and trends in the variables under consideration. The advantages associated with such indices are numerous, but the most Important advantage would seem to be that these can be used to represent complex phenomena in a format which permits easy comparison over time, or across subjects. The vulnerability indices discussed in this paper deal with economic, social or environmental phenomena, which are multifaceted, and have various dimensions. There is therefore the temptation to complicate matters by having a high degree of detail, which could render the index nonoperational. An important point made in this paper is that simplicity should always be kept in mind when computing indices, given that at the end of the day the purpose of constructing an index is to use it and not just to discuss it.