Countries Grouping Based on Socioeconomic Indicators by Using Cluster Analysis

Abstract

We have used in this research a technique that is rarely used in scientific research which is cluster analysis, where we did apply the two methods, hierarchical and K-means method to put different countries into subgroups internally homogeneous based on socioeconomic properties. The problem of this research is explaining complex relationships between socioeconomic properties for countries. The aim of this study is to derive a model that can be used to put the countries in internally homogeneous groups, and predict the characteristics of other country based on its group. The results that we have found are of both ways are approximately when we put the countries in four groups and five groups, but when countries were put in six groups the results of two methods were identical. An important result of the research that there was similar based on countries socioeconomic properties between Cameroon, Ecuador, Domincan R. and Bolivia (K=6), and There was similar based on countries socioeconomic properties between Greece, Czech Rep., Belarus, Netherlands, Belgium and Austria (K=6), but Afghanistan, Canada and Kuwait were not similar based on countries socioeconomic properties with any other (K=6). In all divisions (K=6), (K=5) and (K=4) Barbados was not similar based on countries socioeconomic indicators with any other.