Weight, Does it Matter? An Analysis of the Weighting Scheme Driving the Environmental Performance Index
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Abstract
The Environmental Performance Index (EPI) is a sustainability index that utilizes 40 mdifferent performance indicators to quantify environmental performance in specific policy categories applicable to all nations. This study examines the 11 issue categories to understand the weighting behind the performance indicators, and how these weights affect the overall score and rank of a country in its respective categories. First released in 2006, the EPI employs data from all states to measure a country’s perceived achievements in environmental policy. The research design focuses on a robustness check of the data, utilizing three different data analyses: equal weighting, factor analysis, and optimization analysis. This topic is extremely relevant to the world today, especially in a sustainability aspect, as performance indices become increasingly popular. It begs the question, does the way in which the index is weighted matter? Past literature has found that weighting is a function of what is being measured, and how an index is weighted may skew the results and understanding that people have of their own reality. Thus, we look to find how different weighting of an index may change the end results and rankings of nations across the world.