Methods An exercise in composite indicators construction: Assessing the sustainability of Italian regions Matteo Floridi a , Simone Pagni b , Simone Falorni b , Tommaso Luzzati a, ⁎ a Dipartimento di Scienze Economiche, Università di Pisa, via Ridolfi 10, 56124, Pisa, Italy b Sustainable Tuscany Foundation, via San Bartolomeo 17, 56024, Stibbio, San Miniato (PI), Italy abstract article info Article history: Received 29 July 2009 Received in revised form 24 February 2011 Accepted 14 March 2011 Available online 5 May 2011 Keywords: Composite indicators Rankings Benchmarking Sustainability Sensitivity robustness This paper presents a piece of research aimed at evaluating the relative sustainability of the Italian Regions. After selecting a core set of indicators, for which we referred to the EU Sustainable Development Strategy, we built a composite index and checked for its robustness. As a result we got ‘many numbers’, that is, a range of possible rankings for Italian Regions. © 2011 Elsevier B.V. All rights reserved. 1. Introduction A major concern of the current scientific and public debate is about sustainability. Much evidence suggests that the huge (and increasing) material basis of our economies (see, e.g., Matthews et al., 2000) poses serious problems in terms both of resource availability and of pollution, involving also detrimental effects on the life-support functions of the ecosystems. In the words of Karl William Kapp, a German institutionalist economist, “serious incompatibilities may develop between economic and ecological (as well as social) systems, which threaten the economic process, its social reproduction, and hence the continued guarantee of human well-being and survival” (Kapp, 1976). Since the 1950s Kapp warned of the potential disruptive effects of an economic development that is not steered towards social needs within the natural environment limits (see e.g. Luzzati, 2009, 2010). To this purpose, he advocated the need for the availability of a wide set of indicators including also society and nature (Kapp, 1974, 1977). This has been progressively acknowledged by governments and interna- tional institutions (UN, OECD, EU, …) so that social and environmental statistics are now largely available. 1 The same abundance, however, poses problems due to our limited ability to process many data at once. As Nobel Prize Herbert Simon (1971, 40–41), put it, “in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate attention ef ficiently among the overabundance of information sources that might consume it ”. Hence, there is a tension between our need of simpli fication and the epistemological and ontological irreducibility of the phenomena under inquiry. Saltelli (2008) provides a clear exposition of pros and cons of composite indicators. Since they summarize complex and multi- dimensional phenomena, composite indicators are useful tools for making interpretations easier and for helping benchmarking operations. However, if badly constructed or misinterpreted, they may send misleading policy messages. Their results are powerful enough to facilitate communication with the general public and to begin discussion between policy-makers, but may lead users to draw simplistic conclu- sions. Hence, they have to be presented carefully, both in the underlying set of indicators and in the hypotheses used to build them. Sustainability, well-being, and welfare are typical topics where composite indicators have been used. The Index of Sustainable Economic Welfare (Cobb, 1989), Human Development Index proposed by the United Nations Development Programme (1990), Adjusted Net Savings (Pearce and Atkinson, 1993), Genuine Progress Indicator, and Environmental Sustainability Index (Esty et al., 2005) are examples of popular indexes that combine several important features of our life. It is important to notice that in most cases composite indicators allow for Ecological Economics 70 (2011) 1440–1447 ⁎ Corresponding author. Tel.: + 39 050 2216 329; fax: +39 050 2216 384. E-mail address: tluzzati@ec.unipi.it (T. Luzzati). 1 At the same time, indicators are often scarcely comparable across time and countries and their availability at local levels is uneven. 0921-8009/$ – see front matter © 2011 Elsevier B.V. All rights reserved. doi:10.1016/j.ecolecon.2011.03.003 Contents lists available at ScienceDirect Ecological Economics journal homepage: www.elsevier.com/locate/ecolecon