Economic Security and Physical Safety in the European Union: A Multivariate Statistical Analysis

Abstract

In recent years, scientific papers pay attention to quality-of-life indicators beyond GDP-based measurements. Material and non-material indicators have become significant parts of life quality evaluations. The economic security concept developed by European Commission consists of disposable income and economic risk measurement. Economic security is also one of the top priorities for the European Union (EU) to achieve its goals and increase its competitiveness in the world economy. EU measures economic security, in the member countries and candidates through some indicators as a sub-dimension under quality-of-life indicators. The aim of this paper is to show the changing relative performance of the old members and the new members of the EU. While the countries that joined the EU before 2004 are accepted as old members, the countries that joined the EU after 2004 are accepted as new members. In relation with this division, Germany, France, Italy, Belgium, Netherlands, Luxembourg, Ireland, Denmark, Greece, Spain, Portugal, Sweden, Austria and Finland are accepted as old members. However, Slovenia, Slovakia, Estonia, Latvia, Lithuania, Cyprus, Malta, Poland, Hungary, Czechia, Bulgaria, Romania, Croatia are the new members. We used two multivariate statistical methods, principal components analysis, and cluster analysis to show the relative and changing performance of the member countries for the years 2008 and 2021. The aim of using principal components analysis is twofold. The first aim is to decrease the dimensionality before cluster analysis. The second aim is to rank the countries in terms of chosen indicators. However, the aim of cluster analysis is to group the countries which have similar performance. According to principal components analysis results, Luxembourg is the most successful country in terms of the variables used to represent economic security and physical safety in the EU. Netherlands, Czechia, Germany, and Sweden are the countries that have the highest rankings. However, Greece is the only country with the lowest economic security and physical safety levels. Countries are grouped under four clusters.