The Feasibility of Constructing a Synthetic Index of Social Cohesion for Latin America

Abstract

Synthetic indices of inequality, poverty and well-being have become increasingly popular, both in academia and among policy makers. This has been accompanied by a broad-ranging debate about how to use multi-dimensional approaches to design a synthetic index that effectively describes the multiple dimensions which affect levels of deprivation, poverty and welfare.

The aim in this paper is to assess the feasibility, relevance and importance of creating a synthetic index of social cohesion for Latin America and the Caribbean, using this system of indicators for the region’s countries as a framework. In doing so, we must bear in mind that the conceptual and empirical problems involved in constructing multidimensional indices have not been fully solved. Pending issues include the selection of dimensions, the indicators’ construction and means of measurement, and how they are to be aggregated and weighted. While the first two of these issues are relevant even to one-dimensional indices, the latter two are specific to multidimensional analysis, and it is on them that we shall focus here. Approaching this problem requires taking account of the complexity of the concept of cohesion itself, and considering whether a broad set of data can be included in a single composite indicator without losing valuable information. The validity and relevance of such an index as a support for social policy-making is also subject to debate.

Keywords: Social Cohesion, Latin America, Multidimensional indices,Well-being

JEL Classification: I3, D63, N36