Life quality indicators can statistically assess and show various complementary aspects of life quality, thus complementing the gross domestic product indicator, which is traditionally used as a measure of a country’s economic and social development. Life quality indicators at EU Member State level are assessed by Eurostat. Most of the Life quality indicators provided by Eurostat are not collected at the municipal level, so similar indicators were included in the Municipal Life Quality Index (LQI), which were grouped into 6 categories. It should be noted that Eurostat Life Quality surveys use large-scale representative surveys to assess life quality, which are not included in this assessment of municipal LQI’s, but use indicators collected at the municipal level that could at least partially lead to satisfaction of life quality. The basis of the Municipal LQI is the Life Quality Model and Index, which was used in the assessment of the impact of EU structural assistance on the life quality, social exclusion and poverty reduction in Lithuania. Life quality in this model was associated with the ability to ensure a sufficient level of material well-being, which is defined by work and employment- related income and housing. Improving life quality is due to satisfaction of health condition, increased access to education and social services, increased participation in cultural life, as well as a favorable living environment – decreasing environmental pollution and increased level of public safety. This Municipal LQI was compiled based on an analysis of the scientific and empirical literature and a review of life quality indices calculated by international organizations.
The methodology for calculating the Municipal Life Quality Index and clustering of municipalities was developed within the EU support Project, which aims to analyse the long-term sustainability of Lithuanian municipal financial structure to promote efficient provision of local public services.
The LQI was compiled in 2016 during the assessment of the impact of the EU structural assistance on Lithuanian cities and towns.
In 2018 the LQI was reviewed and updated in the context of the European Union‘s investment in regional development and its impact on changes in life quality.
Based on the latter assessment, the LQI calculation was reviewed and unpadded in 2020 while implementing the structural reform support project „Municipal Loan Restructuring and Development of Effective Asset Management Measures“ financed by the European Commission.
In 2022, the LQI calculation methodology was revised again, supplemented with new relevant indicators and an updated LQI report for 2013–2020 was prepared.
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.
For the purposes of municipal analysis, municipalities were divided into 4 clusters. The indicators on which municipalities are clustered are presented here.
The clusters were formed in accordance with the principle that the differences in the formed Lithuanian municipal clusters would be as small as possible, and between different clusters – as large as possible. Municipalities in one county may fall into different clusters.
The table below provides a comparison of key indicators by cluster. The indicators that separate each cluster are marked according to the color of the cluster.
This assessment was carried out within the framework of the European Union-funded project “Assessment of Municipalities’ Opportunities to Increase Revenues by Developing Analytical Tools” (No. 04-004-P-0001). The aim of the project is to analyse the comparative indicators and data of municipalities in order to create the prerequisites for evidence-based decision-making, allowing to reduce the fiscal gap between municipalities and increase municipal revenues and optimise recurrent expenditure. More information about the project can be found here.
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