Where Is Life Better? An Analysis of Country Development using Data Mining Techniques

Octavian CEBAN, MSc Student, Faculty of Economic Cybernetics, Statistics and Informatics, Bucharest University of Economic Studies

Keywords

Country development, PCA, HDI, human development index

Abstract

This study aims to analyze the degree of countries development taking into account two fundamental components: the economic aspect and the social aspect. For each of these two aspects, a set of data consisting of six variables will be analyzed, a composite index will be created using the Principal Component Analysis. With these two new dimensions (one for the economic aspect and one for the social aspect) clusters will be created using the k-means algorithm. In order to rank the countries we will build another index made up of the two indices previously formed. Data for the empirical application is most recently available, most of 2016. The study contains various types and examples of composite indices and some limitations.