A sensitivity analysis of the RIE index as a supplementary tool for national policy making

Abstract

Purpose

The purpose of this paper is to demonstrate the potential of the resource-infrastructure-environment (RIE) index as a supplementary tool to assist policy makers.

Design/methodology/approach

This study undertakes a sensitivity analysis (SA) to assess the responsiveness of the RIE index to potential policy actions on three countries: Australia (mid-industrialised nation), Mexico (emerging economy) and the USA (highly industrialised nation).

Findings

The results show that the RIE framework is capable of accommodating SA to guide the policymakers on the directional changes of the index to measurable changes to its component parts.

Research limitations/implications

Although the initial results seem promising, further refinement of the indicator is required before it can be practically implemented. For instance, the RIE framework has yet to incorporate dimensions to represent distribution and effects of substitution.

Originality/value

The paper undertakes a SA to assess the responsiveness of the RIE index which is an alternative measure of progress for nations that has the capability to capture more aspects important to progress.

Citation

Natoli, R. and Zuhair, S. (2016), "A sensitivity analysis of the RIE index as a supplementary tool for national policy making", International Journal of Social Economics, Vol. 43 No. 2, pp. 161-189. https://doi.org/10.1108/IJSE-05-2014-0107