COMPOSITION OF LIFE QUALITY INDEX
The data published by the Lithuanian Department of Statistics are mostly used to calculate the values of the LQI and its sub-index.
The index consists of two types of indicators – related to a specific administrative territory (infrastructure density, air and water quality, etc.) and related to individuals living in a specific territory (number of users of various services, income, etc.). It is assumed that such a combination of indicators creates preconditions for a more accurate assessment of the life quality in urban areas, as it measures not only the area’s potential (existing infrastructure) but also the use of territorial potential (number of infrastructure users, opportunities provided by existing infrastructure).
As some of the indicators depend on the number of inhabitants, the size of the geographical area and other parameters, the values of the indicators in the sources have been converted into relative values (standardized) in absolute values in order to compare municipalities of different sizes.
All values of the indicators are normalized by recalculating them with 2013 minimum and maximum values for the same indicator. During normalization, the indicators for each year are converted into a scale of comparable indicators. Monetary value indicators were transformed from nominal to real values at the prices of the last year (2020).
Multiplying the normalized indicators by their weight and adding the obtained values, the values of the municipal sub-index are obtained (for example, the normalized average monthly gross earnings in euros in Vilnius (indicator A1) are multiplied by 0.3, the remaining five indicators of the same sub-index multiplied by their weights, adding the obtained values gives the value of the sub-index in 2020 – 1.21).
Finally, the obtained values of the sub-index are multiplied by the weight of the sub-index and, by summing the obtained results, the final value of the quality of life index of each municipality is obtained. For example: the material living conditions of the Vilnius city municipality (the value of 1.21 in 2020 (sub-index A) is multiplied by a weight of 0.3, the other five sub-index are multiplied by the weights assigned to them and, by adding the obtained values, the Vilnius city municipality life quality index is 0.87).
The maximum LQI value may increase and exceed 1. The LQI is calculated by normalizing the values of the indicators for each year using the maximum and minimum values for 2013, therefore, the normalized values of some indicators do not fit on a scale from 0 to 1. Such indicators affect the sub-index estimate, since the normalized values of all sub-index are summed, and this effect is not affected even by the fact that different weights are assigned to individual indicators.