Methodology

The Prosperity Index

We calculate the results of each of the pillars using approximately ten indicators that relate to the given issue. We draw this data from open sources such as Eurostat, OECD, WHO, World Bank or the UN.

We recalculate each metric according to the order in which the 27 European countries were placed, and we arrive at the results of each of the ten pillars in the same way. We evaluate each indicator with the same weight, so that there is no advantage or disadvantage of any of the variables.

In a similar way to how we calculate the results of each thematic pillar, at the end of the year, we also calculate the resulting Prosperity Index of the Czech Republic, which is then based on almost a hundred metrics.

Economic Complexity

The economy of a country is closely related to its prosperity. At the same time, however, it is a very complex area that can be examined from many angles. Therefore, in addition to GDP, we also focus on economic complexity, added value or robotization.

Within this pillar, we focused on the following indicators:

Economic Complexity: This is an indicator that is regularly compiled by organizations such as the OEC (The Observatory of Economic Complexity) and Harvard University. The indicator measures the degree of diversification of the economy. The greater the number of products from various economic sectors a country exports, the better it performs in the index. The bottom ranks of the index are occupied by countries whose exports consist mainly of one commodity (e.g. oil).
Gross Domestic Product/Gross National Income: This measures the relationship between GDP, which is the added value created in a given country (plus a small item related to taxes), and GNI as the amount of value earned by the people of the Czech Republic. We used the share of these indicators for the Index. The more the value of the indicator approaches (or exceeds) the 100% level, the better the country’s position in the index.
Explanation for the Czech Republic (approx. 96%, the sixth smallest share within the EU): Significantly more will be created in the Czech Republic than what the residents of the Czech Republic will receive through profits and wages. The difference lies not only in the outflow of dividends abroad, but also, for example, in setting low intra-company (or intra-group) costs and prices for goods, services, software, development or licenses from Czech subsidiaries to foreign mothers, or favorable loans for foreign owners from their domestic companies (and vice versa).
Gross domestic product per person: Indicator of gross domestic product per capita expressed in purchasing power parity. This takes into account the difference in price levels between individual countries.
Gross value added to total production: This is the share of gross value added produced by all sectors of the economy in a given country and total output. Simply put, it is the equivalent of the gross margin in businesses (value added/total turnover).
Inflation rate: This is expressed by the increase in the average consumer price index for the last 12 months against the average of the previous 12 months. In the index, we measure the distance of the inflation rate from the 2% target (a high rate of deflation is as harmful to the economy as a high rate of inflation).
Investment to GDP ratio: Expressed as gross fixed capital formation (acquisition of new tangible and intangible assets; machinery and equipment, intellectual property rights, etc.) relative to GDP. The larger this share, the better within the index results. However, it is also important to monitor which areas the investments are directed to.
Number of robots per 10,000 employees: This is an indicator that is regularly monitored by the International Federation of Robotics (IFR). It expresses the number of industrial robots per 10,000 employees in the manufacturing industry.
Export value added/total output: This is the added value (its share, therefore %) that remains in the given country from the export (i.e. the difference between the export value and the value of intermediate consumption). The percentage indicator is measured and published by the OECD.
Foreign direct investment: Both incoming and outgoing foreign investments are taken into account in the index. It cannot be said that the greater the rate of inward foreign investment, the better for the given country. Therefore, we also take into account outgoing (outward) investments in the indicator. In both cases, this is the state of investments (stock).
Public debt to GDP: A country’s debt ratio expressed as a share of GDP.

Quality of education and research

Education is the absolute foundation for a developed society. We therefore also compare the Czech Republic with other countries in terms of how Czechs stand in terms of education, digital literacy or how the state financially supports education and scientific development.

Within this pillar, we focused on the following indicators:

Expenditure on education: An indicator by which we compare state spending on education. For the calculation, Eurostat uses the GDP of individual countries, to which it relates the expenses with which states support education. The larger this share, the better the country ranks within the results of the index.
Research expenses: An indicator by which we compare total expenditure (public and private) on research and development. For the calculation, Eurostat uses the GDP of individual countries, to which it relates the expenditure by which states support research. The larger this share, the better the country ranks within the results of the index.
Using the Internet: The DESI Index compares digital skills and environments across Europe. We used its data to compare user abilities related to the Internet environment. For the Czech Prosperity Index, we used the scores of the countries in the categories of basic and advanced internet skills (searching for information, communication, problem solving, creating content, etc.) and basic software skills (using software, more advanced table functions, presentations or basic knowledge of a programming language).
Participation of adults in education: Eurostat data also shows how adults (aged 25 to 64) participate in education and special education courses. The results are expressed as a percentage of the population and show what proportion of adults participated in such an activity in the last four weeks prior to the survey.
Cooperation between companies and universities: This indicator is one of the components of the so-called Global Innovation Index. Using a questionnaire survey, the researchers asked how much private companies and universities cooperate. Based on the answers, the countries received a score, which we later used in the Czech Prosperity Index.
Number of granted patents: The indicator is based on data from the World Intellectual Property Organization (WIPO), which collects data on granted patents in individual countries. In order to achieve a balanced comparison, we recalculated the number of granted patents per population of individual states. The index therefore calculates the number of patents per million inhabitants.
Young people with tertiary education: We focused the indicator on the population of individual European countries aged 25-34. With the help of Eurostat data, we examined what percent of this generation has completed tertiary education, i.e. college or higher vocational school. The higher this ratio was, the better the country ranked in the index.
Quality of universities: To compare the quality of universities, we used the World University Ranking, which compares a total of 867 of the world’s best universities, in a total of twenty indicators. These can be combined into four basic areas, which are teaching, research, international cooperation and financial sustainability. By combining these areas, the university gets a score that expresses its quality. For the purposes of the Czech Prosperity Index, we used institutions that scored at least 50 points out of 100. We calculated the number of these institutions per million inhabitants of each country. However, the comparison lacked the universities of Cyprus, Luxembourg and Malta, for which we used the company’s comparison.
Innovation potential: Here we used the Global Innovation Index once again, but this time in its full scope. The publication compares the world’s countries in seven different categories, which are broken down into smaller indicators. The Global Innovation Index evaluates, for example, the political environment, human capital, education, investment, ecology and a number of other areas.
Reading, Math and Science: The OECD participates in compiling the PISA ranking, which evaluates the educational environment in individual countries. In the Czech Prosperity Index, we used a comparison of students’ abilities in reading, mathematics and natural sciences. Each country in the comparison received a certain number of points in each of these areas, which correspond to the average skills of the students. In the Prosperity Index of the Czech Republic, we combined these three categories and the higher the country’s score, the better its ranking.

Solidarity and trust in society

Prosperity is not only about finances, but also about how people treat each other, if they respect and help each other. This area includes, for example, people’s mutual trust, the level of corruption or how many people lack someone they could turn to in case of emergency.

Within this pillar, we focused on the following indicators:

A close person in case of emergency: The first indicator of the pillar called Freedom and Trust in Society is one of the seven components of the World Happiness Report comparison. The score in the indicator Person close in case of emergency is calculated according to the basic question: “If you were in trouble, can you rely on the help of family and friends under any circumstances?”
Donating money: The results of this indicator are based on the World Giving Index ranking of the Charities Aid Foundation. This index consists of three parts and we examine each of them separately in the Czech Prosperity Index. The first of these expresses how many residents of each country donated money in the last month before the survey was conducted.
Volunteering: The second component of the World Giving Index, which is Volunteering, is evaluated in the same way. The researchers thus asked the respondents what percentage of them had volunteered in the last month, from which they then deduced the result for each country.
Helping a stranger: The final component of the Charities Aid Foundation comparison is Aid to the Unknown. The question asked to the respondents was: “In the last month, have you helped an unknown person who needed help?” Also in this part, the result indicates what percentage of the population of each country helps.
Happiness Index: With this indicator, we return to the ranking of the World Happiness Report, from which we drew data for the indicator called Person close in case of emergency. This time, we used the Happiness Index as a whole with all its components. In addition to the already mentioned, this comparison takes into account GDP per person, life expectancy, freedom of decision, generosity, perception of corruption and a comparison with a hypothetical dystopian country that would correspond to the worst results of each category. The higher the score on a scale of 0-10 each country achieved in the overall comparison, the better it ranked in the World Happiness Report and the Happiness Index indicator.
Neighborhood Trust: The indicator called Trust in the neighborhood takes into account what percentage of the population of each country trusts the people around their place of residence. The source of the data is the Wellcome Global Monitor survey.
Trust in Government: This indicator is based on a regular survey of public opinion in the EU called the Standard Eurobarometer. The resulting ratio shows what percent of people trust their state’s government. However, in order to avoid a distortion in the comparison caused by the change of politicians in the government, in the Czech Prosperity Index, we calculated the average of the last ten years (Standard Eurobarometer 77, 79, 81, 83, 85, 87, 89, 91, 93, 95). Rather than trust in politicians, this indicator shows trust in the government as an institution.
Freedom of the press: The data for the Freedom of the Press indicator is based on a comparison created by Reporters without Borders. This index consists of several components, among which is a questionnaire survey (e.g. plurality, independence, or transparency of the media) and a summary of violations of the rules of journalistic practice and the rights of reporters. The lower a country scores on a scale of 0-100, the freer its media is.
Perception of corruption: A number of non-profit organizations deal with the perception of corruption, and for the purposes of the Czech Prosperity Index, we chose the Transparency International comparison. This statistic ranks individual states on a 0-100 point scale, with the hypothetical hundred representing a country where corruption is almost non-existent. To compile the rankings, Transparency International always uses at least three data sources from a package of 13 surveys and comparisons.
Independence of the courts as perceived by society: In the case of judicial independence, we used the regular EU Justice Scoreboard report, which evaluates the efficiency, quality and independence of judicial systems in individual EU countries. In the Prosperity Index, we included the area of judicial independence as perceived by society. We included responses that rated the independence of the courts as “fairly good” and “very good”. The result therefore shows how large a proportion of the population of European countries perceives the courts in their homeland as independent.
The rise of discrimination based on ethnicity: The growth of discrimination due to ethnicity is an indicator based on the results of one of the irregular Eurobarometer surveys entitled Discrimination in the European Union. The question posed to residents of individual EU countries was: “How widespread do you perceive discrimination based on ethnic origin to be in your country?” Countries with a smaller share of answers stating “Ethnic discrimination is very widespread in my country” achieve a better position in the Prosperity Index of the Czech Republic.
Integration of migrants: The last part of the Freedom and trust in society pillar is Migrant Integration, which is based on a comparison of the Migrant Integration Policy Index. The latter focuses on the setting of the state and migration policy towards people coming from abroad. The comparison includes human rights, job opportunities, integration of immigrants into society, etc. The higher the country’s score on a scale of 0-100 points, the better the environment it offers to migrants and the better its position in the Czech Prosperity Index.

State of the environment

A developed society does not destroy nature, on the contrary, it returns to it what it takes from it. In this area, we examine how the Czech Republic is doing in recycling, minimization of waste production, in the share of renewable sources in electricity production, or in reducing emissions from buildings and transport.

Within this pillar, we focused on the following indicators:

Waste production: This indicator shows how many kilograms of municipal waste per inhabitant are generated annually in each of the EU countries. The data source is Eurostat.
Recycling rate: Eurostat is also the source of another indicator dedicated to municipal waste. This time it is about the recycling rate, which indicates what proportion of municipal waste each state is able to successfully recycle.
Emissions from household heating: There are many sources of greenhouse gas emissions, and we have included only selected ones in the fourth pillar of the Czech Prosperity Index. The first significant source of emissions is the heating and cooling of buildings. This indicator is based on Eurostat data and shows how many kilograms of greenhouse gases from heating and cooling households per inhabitant of each state.
Emissions from transport: Another important polluter is traffic. In order to cover all greenhouse gas emissions from this area, we decided to combine emissions from industrial transport (in which Eurostat also includes storage) and from private household transport. The indicator is again calculated in kilograms of greenhouse gases per inhabitant of the state.
Emissions from industry: Another source of pollution is industry itself. Here, too, the unit is kilograms of greenhouse gases per inhabitant.
Emissions from land use and forestry: By emissions from land use and forestry, we refer to those summarized by the UN with the abbreviation LULUCF. This acronym refers to the inventory of greenhouse gases using soil and forestry. In the case of a negative LULUCF value, forests and soil are able to absorb a sufficient amount of emissions. However, if this value is positive, this indicator shows emissions in million tonnes of CO equivalent2, which the given state is no longer able to accommodate with its forests and soil.
Greenhouse gas emissions per inhabitant: In addition to the sources of emissions, it is also important to monitor their impacts. Therefore, in the fourth pillar, we also focused on the amount of greenhouse gas emissions per inhabitant. These are reported by Eurostat in tonnes of CO equivalent emissions₂.
Air pollution in cities: In addition to emissions per inhabitant, we also monitor the impact of emissions on the air in European cities. We focused on dangerous microscopic particles smaller than 2.5 micrometers, which were measured by the European Environment Agency in urban agglomerations. It is these particles of the smallest size that are the most dangerous for human health.
Deaths due to air pollution: We also included deaths caused by air pollution in the results of the environmental pillar. In this indicator, we monitor deaths caused by polluted air per 100,000 inhabitants.
Drought: Among the indicators of the fourth pillar, we also included dry land in individual countries. We have drawn data for this indicator from the European Environment Agency and include all land affected by drought between 2000 and 2019. It is the share of dry land in the total area of the country.
Water consumption: Water consumption in individual states, which is monitored by the Food and Agriculture Organization, also contributes to the state of the environment. In the comparison, we included the average annual consumption in m3 per inhabitant.
Renewable sources in energy: In the following three indicators, we are already addressing the factors that improve the state of the environment. One of them is the share of renewable sources in gross energy consumption in individual countries. The source of these data is Eurostat.
Area of land covered by forests: The area of land covered by forests also plays a non-negligible role. These contribute to a better state of the environment, among other things, thanks to the absorption of emissions. The share of forests on the area of individual countries is monitored by Eurostat.
Investing in the environment: For this indicator, we monitor national investments in environmental protection, which are monitored by Eurostat. In the comparison of the fourth pillar of the Czech Prosperity Index, we included national expenditures as a percentage of the GDP of each state.

Housing standard

People should live in decent conditions and housing should be affordable. In this area, we therefore compare the Czech Republic both in living conditions and in the amount of necessary expenses for housing or the purchase of a new building.

Within this pillar, we focused on the following indicators:

Financial availability of housing: The source of data for the indicator called the financial availability of housing is the Numbeo database, which compares the prices of owned and rented housing around the world. For data on financial availability, we used the Price to Income Ratio, which compares the median housing price to the median family income. Average prices for apartments in city centers and suburbs measuring 90 square meters are included in the calculation, and Numbeo calculates family income as 1.5 times the average annual salary. The lower the result, the more affordable housing is in that country.
Overcrowded households: The following data shows what percentage of the population lives in overcrowded households. “Overcrowding” is defined by the European Union as a case where each couple or individual does not have their own room. The data source is Eurostat.
Households unable to heat adequately: A number of specific indicators are associated with the quality of housing, and the Prosperity Index works with the key ones. The first indicator that determines the quality of housing in EU countries is the ability to adequately heat the household. This data is published by Eurostat as a percentage of all households in a given country.
Households without sanitary facilities: The availability of sanitary facilities is also important. Among them, Eurostat includes bathtubs, showers and flush toilets. The data included in the Prosperity Index of the Czech Republic thus indicates what percent of the population lack such devices in their homes.
Households that flow into: The quality of housing is also fundamentally influenced by whether it flows into households. In this indicator, Eurostat includes the percentage of the population that lives in a household with a leaky roof, damp walls, floor or foundation, or moldy window frames and floor.
Number of flats and houses per thousand inhabitants: This indicator shows how many apartments or houses there are in a given country per thousand inhabitants. The data source is the Organization for Economic Co-operation and Development (OECD).
Household expenses: Another part of the Housing pillar of the Czech Prosperity Index is an indicator that describes the share of household expenses that are connected to its operation. Housing fees, water and energy costs are included here. The data source is Eurostat.
Length of construction procedure: Part of the Housing pillar is also the average length of the construction process, which differs fundamentally in individual European countries. The data is collected by the World Bank, which has so far presented it in an annual ranking called Doing Business.
Investments in residential construction: With the following dataset, Eurostat tracks the amount of gross fixed capital (investment) that goes into the construction of residential buildings. The indicator is expressed in relation to the GDP of each EU country.
Excessive housing expenses: The indicator indicates the share of households that spend excessive housing expenses (more than 40% of disposable income). Eurostat tracks data for cities, suburban areas and rural areas. For the purposes of the Czech Prosperity Index, we use the average of all three values for the last available year.
Price of new building: The following indicator is a Eurostat index that expresses how the price of new construction changed in 2021 (2020 in some countries) compared to 2015 (year 2015=100). Values above 100 mean an increase in the price of new construction, and values below 100 mean the opposite.
Number of municipalities: The indicator indicates the number of self-governing units per 100,000 inhabitants. A larger number entails more difficult management and less space for quick and effective solutions. This is also why the Prosperity Index evaluates a larger share of self-governing units per population as more problematic.
Advantageous rental housing: We use data from the Numbeo database to evaluate the profitability of rental housing. In addition to financial availability, it also compares whether it is more worthwhile to live in a rental or to buy your own home. A lower result means that it is more advantageous to live “on your own”, while a higher number means that it is more advantageous to live in a rental. Taxes or expenses for property maintenance are not included in the calculation.

Infrastructure level

In today’s hectic world, a country should enable its citizens to communicate quickly and efficiently both with the state and with each other. People should have access to quality transport infrastructure, a reliable Internet and mobile network and, last but not least, the ability to communicate with the authorities online.

Within this pillar, we focused on the following indicators:

Shipping costs: In this indicator, we used Eurostat data on individual government expenditures on transport overall, or for all types of transport. For comparison, we then used transport expenditure expressed as a share of the GDP of the given state.
Road quality: Here, we did not compare individual states according to the actual quality of the roads, but according to the satisfaction of the population with the state of the road infrastructure. For this, we used data from the research company The Global Economy, which carried out a survey across individual countries in which the residents rated the condition of the roads on a 7-point scale.
Road density: To compare the road density, we used the Eurostat dataset, where the density itself is expressed as the number of kilometers of roads per thousand square kilometers.
Density of charging stations: In this pillar, we wanted to reflect how the infrastructure of the given states is prepared for electromobility. For this reason, we included the number of charging stations per hundred kilometers of roads among the indicators. The data source was The European Automobile Manufacturers’ Association.
Rail density: This is an almost identical case to road density. We used Eurostat data, comparing individual states in how many kilometers of railways per thousand square kilometers of the country’s area.
Expenditure on public transport: The basis of this indicator is Eurostat data on the expenses of European households. From this data, we used information about how much an individual in a given country spends on public transport on average.
Availability of public transport in cities: We understand the availability of public transport in cities as the number of people in cities who have an accessible public transport stop within 500 meters. We then averaged this data in each country based on selected cities and then compared the values between individual countries. The data source was Eurostat.
Internet availability in households: Within this indicator, based on Eurostat data, we compared European Union countries in terms of the share of households that have access to the Internet.
High speed Internet coverage: The indicator includes the share of households that have access to high-speed Internet. High-speed Internet means an optical network or an alternative that achieves comparable performance. The data source was Eurostat.
Using Internet banking: For the use of Internet banking, we chose an indicator expressing what percent of people in a given country used Internet banking in the last three months, either to make a payment or for any other purpose. For this, we used Eurostat data.
Using egovernment: Based on Eurostat data, within this indicator, we compared European Union countries in terms of the share of the population that communicated at least once with the authorities via the Internet in the last year.
Level of digitization of state administration: For this indicator, we used one of the five components of the DESI index (Digital Economy and Society Index), in which individual countries are evaluated at the level of egovernment. Countries were evaluated in five categories, with a total of up to 100 points. Among the categories, for example, was the level of data transparency, the level of services offered to citizens and companies, and the possibility of online pre-filled forms.
Availability of payment terminals: In this indicator, we used data from the European Association for Secure Transactions (The European Association for Secure Transactions), while we analyzed individual countries in terms of payment terminals per 10,000 inhabitants.

The quality of the labor market

The labor market cannot be described only through unemployment figures and average wages. We therefore compare the Czech Republic with European countries also in terms of the gender pay gap, labor productivity and the strength of trade unions.

Within this pillar, we focused on the following indicators:

Unemployment: Data on the first indicator of the Labor Market pillar is collected by Eurostat. Unemployment data simply describes what percentage of the labor force population of each European country is out of work.
Vacancies: The job vacancy rate comes from Eurostat, which collects data for all European countries. The calculation is based on the following formula = [number of vacancies/(number of vacancies + filled positions)] * 100.
Labor productivity: Labor productivity is calculated by Eurostat per hour of work performed. The countries’ scores are calculated according to the average of the European 27. A higher result therefore means higher labor productivity.
Gender pay gap: The gender pay gap is the percentage difference between the salaries of men and women. The main source of data is Eurostat, which, however, does not collect this data for all European countries. The remaining data in the Index is supplemented by statistical offices of individual countries.
Productive population: Eurostat reports numbers of the active population aged 15-64. To calculate the share of the productive population, the Prosperity Index uses a comparison with another Eurostat dataset, which is the total population of individual European countries.
Average working hours: Average weekly working hours are monitored by Eurostat. For the purposes of the Prosperity Index, the result of this indicator uses the deviation from the average of all states.
Reduced working hours: Short-time working hours are reported by Eurostat as a share of the total working hours of workers in a given country.
Occupational accidents: The indicator of injuries at work is presented by Eurostat in a standardized incidence rate. This represents the number of injuries per 100,000 workers in each country. The Prosperity Index of the Czech Republic takes into account injuries that prevent workers from performing their duties for four or more days.
Commuting to work: The time needed to get to work is reported by Eurostat using a number of metrics. The prosperity index of the Czech Republic uses the average minute value for each of the EU countries.
Duration of leave: The minimum length of leave is monitored by the OECD. The results of the Prosperity Index include public holidays in addition to the minimum mandated length of vacation.
Researchers in the workforce: The representation of researchers in the workforce is reported by Eurostat as the share of research and development workers in the total workforce.
Work flexibility: The question of flexibility of working hours lies in the extent to which workers in individual states can decide on the performance of work. Eurostat includes, for example, any working time, the possibility of working from home, the possibility of taking vacation or independence at work.
Equality in the labor market: The European Institute for Gender Equality collects data that we use for the indicator called Equality on the labor market. This indicator, on a scale of 1-100, assesses the extent to which men and women in Europe have equal working conditions. Included in the calculation is the work domain score, which consists of participation, segregation and job quality.

Financial health

A prosperous society knows how to manage finances, both at the level of the state and at the level of individual residents. People in such a society should not be at risk of poverty and foreclosures, and on the contrary, they should have a financial reserve and the opportunity to invest their wealth.

Within this pillar, we focused on the following indicators:

Share of low-income households without financial reserves: We draw the indicator entitled Share of households without financial reserves from Eurostat, which shows how households in individual states are prepared (in this case, rather unprepared) for unexpected expenses. This indicator tells what proportion of households with an income below 60% of the median wage in a given country is unable to face unexpected expenses, such as buying a new washing machine, a funeral or repairing a car or house. The amount is based on the monthly poverty risk limit of each state for the Czech Republic, which corresponds to CZK 12,800.
Share of investments in finance: By calculating the data obtained from Eurostat, the indicator entitled Share of investments in finance, what percentage of the total finances of households in the EU states are represented by investments. In addition to investment funds, investments also include, for example, supplementary pension insurance, etc. The larger the share of investments in the finances, the better the state ranks in comparison.
Social and material deprivation: Serious material and social deprivation is based on Eurostat as a percentage of the population. The European Union characterizes this value as the proportion of people who live in ordinary homes, but are unable to cover at least five of the thirteen basic needs that are inextricably linked to the standard of living. These needs include, for example, the inability to heat adequately, replace broken furniture, cover unexpected costs, buy new clothes or secure an Internet connection for financial reasons.
Savings against income: This indicator shows how much the residents of individual states are able to save from the income they have. The higher the share of money saved, the better the state’s result in comparison.
Household indebtedness: The Household Indebtedness indicator shows the ratio between household income and debt in the EU. The higher the result, the higher the indebtedness of the households of the given states and the worse their position in the Czech Prosperity Index. The data sources are Eurostat, ECB and ECRI.
Failure to pay utility bills on time: The following indicator shows the percentage of households in EU states that are unable to pay their utility bills (heating, electricity, water, gas, etc.) on time.
Financial equality: The indicator of financial equality is based on the results of the Gender Equality Index survey, which compares gender equality in each of the EU countries. For the purposes of the Financial Health pillar, we used the segment that researchers refer to as “Money”. This includes, in particular, equality in remuneration and the risk of poverty for women and men. The results of this index come out as a score for each country, and the higher the result each country achieves, the better it is placed in the comparison.
Food expenses: The ability to buy food is one of the basic necessities of life. Eurostat tracks a number of different expenditures, and food expenditures are one of them. Expenditure on food and non-alcoholic beverages is also reported by Eurostat as a share of total household expenditure.
Energy expenditure: The ability to pay for energy is one of the basic necessities of life. Eurostat tracks a number of different expenses and spending on electricity, gas and other fuels is one of them. Eurostat also reports energy expenditure as a share of total household expenditure.
Expenses vs. financial assets: Among the indicators of the Financial health pillar, we also included the share of household financial assets and their total expenses. The calculation is based on total household expenses (in millions of euros) and total household financial assets. The indicator shows how many times financial assets exceed expenses.

Environment for entrepreneurs

People should have easy access to business in a developed country. Within the framework of the business environment, we compare the Czech Republic with other countries, for example, in terms of the annual increase in newly established companies or the amount of expenses associated with running one’s own business.

Within this pillar, we focused on the following indicators:

Number of startups: The indicator on the number of startups is based on the annual comparison of the State of European Tech survey by Atomico. We recalculate the results of individual European countries per million inhabitants. The results for Belgium are missing from the source, so we draw them from Dealroom.co.
Number of companies per population: The following indicator is based on Eurostat data, which shows the number of companies with ten or more employees. We chose companies with at least ten employees in order to clean the data by the number of individuals who are self-employed. The number of companies in each of the EU countries is calculated per million inhabitants.
Corporate tax: This indicator shows the amount of corporate income tax. It is different in every country and is often governed by different rules. The data comes from the Worldwide Tax Summaries website, operated by PwC.
Market capitalization: Market capitalization is equal to the share price multiplied by the number of shares outstanding. We used the indicator of the market capitalization of domestic companies in individual EU countries in relation to GDP. The data source is the World Bank.
Added value of companies under foreign control: The following indicator shows how much of the added value is accounted for by foreign-controlled firms compared to domestic firms. A lower share means a better placement in the Environment for Entrepreneurs pillar. The data source is Eurostat.
Gap in VAT collection: The gap in the collection of VAT (the so-called VAT Gap) means the difference between the expected (according to the applicable legislation) and the actual collection of VAT. The data source is Eurostat.
Establishing a business: The following indicator indicates how easy or difficult it is to set up a company in individual EU countries. The results come from the last year of the Doing Business project, which compares the business environment around the world. In doing so, we used the ranking of individual countries within the pillar of Starting a Business, which assesses the difficulty of setting up a business in terms of time, costs and the number of necessary steps.
Expenditures of companies on research and development: The indicator relating to investments in research and development comes from Eurostat. Eurostat reports company investments as a percentage of GDP.
Investment in intellectual property: This is the share of investments in intellectual property in the total formation of gross fixed capital (investments). The higher the result the countries achieve, the better they are placed. The data source is Eurostat.
Companies’ electricity costs: The following indicator tracks the average cost of a kilowatt-hour of electricity for a company with a consumption of 500 MWh to 2,000 MWh. Eurostat gives the price in euros. The resulting amount is the average price for the past year 2021.

Health and safety development

A prosperous society takes care of its health and safety. At the same time, it is prepared for situations where danger appears, both in the form of illness, injury and criminal acts. In this area, we compare the Czech Republic in, among other things, the proportion of the obese population, the availability of medical care, crime and the state’s defense spending.

Within this pillar, we focused on the following indicators:

Healthy life expectancy: We use Eurostat data, which shows how many years people in individual countries live in good health. The value shows how many years after birth the population of the EU countries lives on average without serious or moderate health problems. Serious health problems include those that limit respondents’ normal activities for at least six months of life.
Obese population: Obesity is generally considered to be a condition where an individual’s BMI (Body Mass exceeds 30 kg/m3. Between 25 and 30 kg/m3 is the category of pre-obesity and the category referred to as “overweight” combines both obesity and pre-obesity. Within the Index, we used the proportion of people suffering from obesity. The data source is Eurostat.
Unavailability of medical care: The indicator shows the proportion of people older than 16 years of age who do not have access to medical care. Reasons include financial inaccessibility, long distance and long waiting time. The data source is Eurostat.
Crimes in the vicinity of residence: This indicator shows the proportion of people who reported crime, violence or vandalism in the vicinity of their residence. The data source is Eurostat.
Hospital beds: The following indicator shows the availability of hospital beds in individual states. Eurostat reports data per 100,000 inhabitants. These are all hospital beds available to hospitals in the given states.
Infant mortality: We are based on Eurostat data, which is the share of children who died within one year of birth. The value of infant mortality is given as per thousand newborns, i.e. as deaths per thousand newborns.
Defense expenditure: Eurostat also monitors the expenditures that the governments of individual countries invest in their defense. It reports these values as a percentage of GDP.
Serious crimes: According to their nature, Eurostat divides criminal acts into several different categories. For the needs of the pillar entitled Development of health and safety, we have included murders, robberies and assaults in the indicator entitled Serious crimes. We added up this serious criminal activity and converted it to 100,000 inhabitants in each of the EU countries.
Cyber Security: The cyber security indicator is based on the National Cyber Security Index, which is supported by the e-Governance Academy Foundation. The ranking compares most of the world’s countries in 46 indicators related to cyber security. These indicators include, for example, the police’s fight against cybercrime, military operations in cyberspace, personal data protection, cyber-policy development and online security education.
Healthcare expenditure: One of the indicators of the Health and Safety Development pillar is investments in the healthcare sector. In this indicator, we used all sources of finance. We present the values as a percentage of the GDP of each EU state.
Victims of bank fraud: Card or online banking fraud is one of the areas of interest in the Cybercrime and Cybersecurity Eurobarometer. In this pillar of the Czech Prosperity Index, we have therefore included the share of the population that has encountered a similar experience at least once in their lifetime.

Timeline

The Prosperity Index

Economic Complexity February 2023
Quality of education and research March 2023
Solidarity and trust in society April 2023
State of the environment May 2023
Housing standard June 2023
Infrastructure level July 2023
The quality of the labor market August 2023
Financial health September 2023
Environment for entrepreneurs October 2023
Health and safety development November 2023