Construction of Sub-country Level Environment Policy Stringency Index: A Study on Indian States

The abundance of country-level socio-economic development indices is of limited help unless sub-country-level indices on the quality of policies are also available. Tracing the regional indices landscape of India, this study proposes the state-level Environment Policy Stringency Index for Indian states. Capturing Indian states' policies across six areas with weight determination done deploying principal component analysis and Data Envelopment Analysis-Benefit of Doubt approach, the composite index calculated in the study also examines the scores grouping the sub-national units based upon the income levels. Besides ranking for inter-state comparison, the proposed index is significantly associated with particulate matter pollution levels in states. This study has three key contributions: conceptualising the principal-based sub-national index while making a case for developing sub-country level policy indices, identifying state-level environment policy variables and constructing an Environment Policy Stringency Index for Indian states.