The Use of Taxonomy Methods For Clustering European Union Countries Due to the Standard of Living

Abstract

This paper proposes the application of taxonomic tools to study the differentiation of standard of living in the European Union countries. The aggregate distance between given countries is the basis for grouping member states in terms of their internal structure of the studied characteristics. The analysis is based on two chosen methods–the Ward’s and k-means method. The study included 24 member states of the European Union in 1995-2010. Depending on the distance between the object, the countries were divided into two or four clusters. Similar configuration of each group obtained using both methods has led to the conclusion that these methods can be used both complementarily and separately.