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Using composite indicators in econometric decision models with application to occupational health

Tangian, Andranik S.

Abstract:
The paper explains the use of composite indicators as objective functions in econometric decision models. We consider an example of minimizing the harm from two kinds of pollution at the workplace, which can be reduced by two types of anti-pollution measures restricted to a given budget. At first, we define the pollution harm as a sum of two factors and find the optimal budget distribution to minimize it. Next, the harm is regarded as a probabilistic risk, and the cumulative effects from the interaction of two factors is taken into account. The corresponding indicator of the occupational hazard becomes a quadratic function, resulting in a different budget distribution. We also discuss the methodology of using composite indicators and refer to advanced methods of their construction.

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Volltext §
DOI: 10.5445/IR/1000124748
Veröffentlicht am 16.10.2020
Cover der Publikation
Zugehörige Institution(en) am KIT Institut für Volkswirtschaftslehre (ECON)
Publikationstyp Forschungsbericht/Preprint
Publikationsmonat/-jahr 09.2020
Sprache Englisch
Identifikator ISSN: 2190-9806
KITopen-ID: 1000124748
Verlag KIT, Karlsruhe
Umfang iv, 9 S.
Serie Working Paper Series in Economics ; 143
Schlagwörter occupational health; occupational hazard; composite indicators; objective functions; multiple criteria decision making; decision support aid; budgeting
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