Understanding Indexes - Quality of life

Rightly or wrongly, Singapore has earned a reputation of being obsessed with global rankings in whatever form it takes; from university rankings, quality of life, quality of transportation systems, you name it. Each time one of these rankings are published, there will be a lot of debate justifiying or decrying why Singapore is above or below some other country. While this is great for social media engagement, it makes for a lot of unecessary drama.

Quality of life is subjective by nature, different people with different backgrounds, different regions and countries want different things in life. But perhaps there are some elements which coud be universal.

Using the quality of life index published by Numbeo as an example. Numbeo is a leading provider of crowd-sourced data, enabling informed decision-making, fostering transparency, and promoting global understanding; in this instance about the quality of life of each country and city around the world.

Numbeo uses an index as the basis for their rankings. Indices provide an objective means to analyse and compare complex topics, like the quality of life. Numbeo index is assembled using 8 other indices which seek to quantify and rank the following:

Purchasing Power
Pollution
Housing price to income ratio
Cost of living
Safety
Healthcare
Traffic Commute Time
Climate

For more information about how each index is assembled, you may visit their website here.

Quality of Life rankings by country and city

Comparisons by country

Countries from Europe and Central Asia dominate the list of countries with the highest quality of life.
Singapore ranks 28th in a list of 83 countries, and have 3 other East Asian countries rank higher than Singapore - Australia, New Zealand and Japan. 4 middle eastern countries also out rank Singapore - Oman, Qatar, UAE and Saudi Arabia.
No country is the best at every index. Taking Singapore as an example, while Singapore is ranked 28th in quality of life, it ranks well in Safety and Pollution; but ranks poorly in Climate, Cost of Living and Housing Price to Income Ratio.
But unlike some of the other countries on the list, they are large in size with several cities and states. Quality of life could vary by location. Singapore is a city-state. It may not be a fair comparison.

Comparisons by City

No surprise that many of the cities with the highest quality of life hail from the countries with the highest quality of life rankings.
Singapore ranks 71st in the list of 178 cities on the list, with 12 other East Asian Cities ranked higher than Singapore.
Similarly, no city ranks well in all aspects; Singapore ranked well in Pollution, Safety and Healthcare and ranks poorly in Cost of Living, Climate and Property price to income ratio.

While these rankings and indices are great for social media engagement and sparking discussion. It is more important to understand the underly basis for how the indices are assembled. While most of the indices have an objective basis; such as

Property Price to Income Ratio - is the ratio of median apartment prices to median familial disposable income, expressed as years of income
Healthcare Index - evaluates the overall quality of the healthcare system, including factors such as healthcare professionals, equipment, staff, doctors, and costs. It provides an assessment of the healthcare infrastructure, services, and resources available in a specific location.

However, one of the indices did catch my eye; specifically, the climate index. Climate index is an estimation of the climate likability of a given city or a country. It is in the range [-100, +100] (higher is better). Cities with climate index 100 have moderate temperatures and low humidity and no other major weather condition which is usually not preferred by most people. However, some persons prefer colder climate while others prefer warmer climates and some people are fine with humid conditions, so this index is general guidance, which shall not be blindly considered.

Pros and Cons of using Indices

Indices are valuable tools that simplify complex information into easy-to-understand scores and rankings. They are used in various fields, from economics to health, to provide insights and guide decision-making. However, like any tool, they have their advantages and limitations. Let's explore the pros and cons of using indices.

Benefits of using Indices

Simplifies Complex Information Indices take vast amounts of data and distill it into a single number or ranking. This simplification makes it easier for people to understand and compare different entities, such as countries, cities, or companies. For example, the Quality of Life Index by Numbeo allows people to compare the livability of different cities based on multiple factors like cost of living, healthcare, and safety.
Aids Decision Making By providing clear and concise information, indices help individuals and organizations make informed decisions. For instance, investors might use economic indices to decide where to invest their money, while families might use school ranking indices to choose the best educational institutions for their children.
Identifies Strengths and Weaknesses Indices highlight areas of strength and areas needing improvement. This can guide policymakers and stakeholders in targeting their efforts. For example, an environmental index that shows high pollution levels can prompt local governments to implement stricter environmental regulations.
Promotes Awareness Indices draw attention to important issues by quantifying and ranking them. This can increase public awareness and drive action. For example, the Human Development Index (HDI) raises awareness about global inequalities in health, education, and income.

Risks in using Indices

Subjective Components Some components of indices are based on subjective judgments and personal opinions, which can vary widely among individuals. For example, perceptions of safety or quality of life can differ greatly from person to person, affecting the reliability of these measures.
Manipulation of Weights Indices often combine various factors, each assigned a specific weight. These weights can be adjusted to influence the overall outcome, potentially leading to biased results. For instance, an index giving more weight to economic factors over environmental ones might favor economically strong but environmentally poor regions.
Data Quality and Reliability The accuracy of an index depends on the quality of the data used. Outdated or unreliable data can lead to misleading results. For example, if an index relies on old crime statistics, it might not accurately reflect current safety conditions.
Over-Simplification While indices simplify complex information, they can sometimes oversimplify, missing important nuances. For instance, two cities might have the same quality of life score, but one might be better suited for families, while the other is ideal for young professionals.
Biases The design of an index can reflect the biases of its creators. If the creators prioritize certain factors over others, the index might not be neutral. For example, a cost of living index might favor cities with lower expenses, overlooking other important aspects like cultural vibrancy or community support.

Key Takeaways

Indices are powerful tools that can provide valuable insights and aid decision-making by simplifying complex data into understandable rankings. However, it is important to be aware of their limitations, such as subjective components, potential biases, and data quality issues. By understanding both the pros and cons, we can use indices more effectively and make better-informed decisions.