THE APPLICATION OF DIFFERENT SYNTHETIC MEASURES FOR STANDARD OF LIVING MEASUREMENT

The synthetic variable is one of the methods to examine differences in thestandard of living among countries. The synthetic variable allows to replace the wholeset of variables into one aggregated variable. This variable is the basis for organizingand grouping countries in terms of standard of living. In the literature one can findvarious aggregation methods. The purpose of this article is to show, how theapplication of chosen method of creating the synthetic measure affects the final resultof ordering and grouping objects.