Type of practice:
The Analytical Hierarchy Process (AHP) is used for the purpose of the Impact Assessment on a European Union Programme for Social Change and Innovation. The AHP is a structured technique for organizing and analysing complex decisions, based on mathematics. It provides a comprehensive and rational framework for structuring a decision problem, for representing and quantifying its elements, for relating those elements to overall goals, and for evaluating alternative solutions. The econometric methodologies implemented are the Generalized Method of Moment (GMM) and the Panel Vector Autoregression (P-VAR). In econometrics, generalized method of moments (GMM) is a generic method for estimating parameters in statistical models. Usually it is applied in the context of semiparametric models, where the parameter of interest is finite-dimensional, whereas the full shape of the distribution function of the data may not be known, and therefore the maximum likelihood estimation is not applicable. The corresponding IA Report (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2011:1130:FIN:EN:PDF) gives an account of these applications.