Utility effectiveness, composite indicators and ‘benefit of the doubt’ models: how important are preferences when evaluating the performance of innovation systems?

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dc.contributor.authorZofío, José L.
dc.contributor.authorAparicio, Juan
dc.contributor.authorBarbero, Javier
dc.contributor.authorZabala Iturriagagoitia, Jon Mikel
dc.date.accessioned2026-08-07T08:48:21Z
dc.date.available2026-08-07T08:48:21Z
dc.date.issued2026-08
dc.date.updated2026-08-07T08:48:21Z
dc.description.abstractThis study introduces a methodology that embeds ‘Benefit of the Doubt’ evaluations of performance of innovation systems, based on objective measures of technical effectiveness—that compare the values of a set of indicators across countries—into the literature of composite indicators, which rank countries relying on utility functions and whose aggregating structure and weights are subjectively chosen by the decision makers. Considering the general case of the constant elasticity of substitution utility function, whose power mean formulation nests popular specifications such as the weighted (linear) arithmetic mean, weighted geometric mean (Cobb-Douglas), and fixed-proportions (Leontief), we define the concept of utility effectiveness of an alternative as the ratio of its observed utility to the maximum utility observed across countries. We show that the utility loss resulting from an ineffective performance can be consistently decomposed into two mutually exclusive factors: first, grounded in the objective criterion of Pareto-dominance, the mentioned technical effectiveness is represented by a technical (radial) measure depending only on quantities, which gauges the distance to the utility frontier; second, a measure of allocative effectiveness, determining the additional utility loss resulting from an unbalanced composition of indicators given the preferences of the decision maker. Using data from the European Innovation Scoreboard, our results show high levels of utility ineffectiveness in Southern and Eastern European countries. On average, these countries' performance is half of the maximum utility reached by the best performing innovation systems. Objective technical ineffectiveness generally dominates over subjective allocative ineffectiveness (except for the fixed proportion specification), showing that the practical impact of choosing one utility specification over another, although sizable, is limited. Consequently, main performance deficits are often not due to substitutability or compensatory issues, but rather to real shortfalls in indicator levels, while preference-driven differences tend to be second-order and comparatively robust.en
dc.description.sponsorshipJ. Aparicio and J.L. Zofío thank the grant PID2022-136383NB-I00 funded by MICIU/AEI/10.13039/501100011033 and by ERDF/EU. J.M. Zabala-Iturriagagoitia acknowledges financial support from the Basque Government Department of Education, Language Policy, and Culture (IT 1429-22). This research was also partially supported by the CIPROM/2024/34 grant, funded by the Conselleria de Educacion, ´ Cultura, Universidades y Empleo, Generalitat Valenciana. J. Barbero and J.L. Zofío acknowledge financial support from Grant PID2022-138212NA-I00 funded by MICIU/AEI/10.13039/501100011033 and by ERDF, EU.; from the Community of Madrid/ESF under program PHS-2024/PH-HUM-530 (DiTeCaM-CM); and from the Government of the Principality of Asturias and the European Regional Development Fund (IDE/2024/000712).en
dc.identifier.citationZofío, J. L., Aparicio, J., Barbero, J., & Zabala-Iturriagagoitia, J. M. (2026). Utility effectiveness, composite indicators and ‘benefit of the doubt’ models: how important are preferences when evaluating the performance of innovation systems? Socio-Economic Planning Sciences, 106. https://doi.org/10.1016/J.SEPS.2026.102528
dc.identifier.doi10.1016/J.SEPS.2026.102528
dc.identifier.issn0038-0121
dc.identifier.urihttps://hdl.handle.net/20.500.14454/6485
dc.language.isoeng
dc.publisherElsevier Ltd
dc.rights© 2026 The Authors
dc.subject.otherBenefit-of-the-doubt evaluation
dc.subject.otherComposite indicators
dc.subject.otherInnovation performance
dc.subject.otherInnovation systems
dc.subject.otherUtility effectiveness
dc.titleUtility effectiveness, composite indicators and ‘benefit of the doubt’ models: how important are preferences when evaluating the performance of innovation systems?en
dc.typejournal article
dcterms.accessRightsopen access
oaire.citation.titleSocio-Economic Planning Sciences
oaire.citation.volume106
oaire.licenseConditionhttps://creativecommons.org/licenses/by/4.0/
oaire.versionVoR
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