Mishra, SK (2017): Almost equimarginal principle based composite index of globalization: China, India and Pakistan.

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Abstract
The present study proposes an alternative method to construct an index of globalization which is based on the principle of almost equimarginal contributions (AEMC) or Shapley values of the constituent variables to the overall index rather than the correlation coefficients among the constituent variables and the overall index (the KOF index based on the principal component scores). This has been done by minimization of the Euclidean norm of the Shapley values of the constituent variables. As an exercise, secondary time series data (19702013) on the measures of globalization in three different dimensions (economic, social and political) of three economies (China, India and Pakistan) have been used. A comparison of the AEMC index with the KOF index reveals that while the former is more inclusive, the latter is more elitist in matters of inclusion of the weakly correlated constituent variables in the overall (composite) index. As a consequence, the AEMC index is more sensitive than the KOF index of globalization. Both indices capture the trends in globalization in the countries under study and are highly correlated between themselves. Thus, AEMC is an alternative or perhaps a better method to construct composite indices.
Item Type:  MPRA Paper 

Original Title:  Almost equimarginal principle based composite index of globalization: China, India and Pakistan 
Language:  English 
Keywords:  Globalization; KOF index; equimarginal; Shapley value; global optimization; China; India; Pakistan 
Subjects:  C  Mathematical and Quantitative Methods > C4  Econometric and Statistical Methods: Special Topics > C43  Index Numbers and Aggregation C  Mathematical and Quantitative Methods > C6  Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61  Optimization Techniques ; Programming Models ; Dynamic Analysis C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory > C71  Cooperative Games F  International Economics > F6  Economic Impacts of Globalization > F60  General P  Economic Systems > P5  Comparative Economic Systems > P52  Comparative Studies of Particular Economies 
Item ID:  81835 
Depositing User:  Sudhanshu Kumar Mishra 
Date Deposited:  11 Oct 2017 17:01 
Last Modified:  11 Oct 2017 17:01 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/81835 