Conclusions
We have constructed a number of summary indexes of economic liberty based on principal component and hedonic weighting techniques. While overall these indexes are related to each other in a statistical sense, there are sufficient differences among them to impact the rankings of the individual countries. Because the liberty indicators currently available for use are fairly coarse, the differences that these weighting techniques yield in the summary liberty indexes are understated. As research on liberty yields finer measures of the liberty indicators, the choice of the weighting technique will become more crucial in defining an overall measure of economic liberty. As Table 3 indicates, the simple overall ranking index we created summarizes the information content of all the other indexes (based on hedonic, data variance, etc. rationale) and appears to be very robust with respect to all of them. In addition, all the rankings indicate that economic growth and RGDP are positively correlated with the level of economic liberty within a nation.
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Scully, G.W., Slottje, D.J. Ranking economic liberty across countries. Public Choice 69, 121–152 (1991). https://doi.org/10.1007/BF00123844
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DOI: https://doi.org/10.1007/BF00123844