APPLIED DISCRIMINANT ANALYSIS IN ESTIMATION OF POTENTIAL EU MEMBERS

The purpose of this research paper is to reveal which European countries are most suitable for EU membership using the multivariate method discriminant analysis. Discriminant analysis is useful for building a model for separation of group membership based on observed characteristics of each country. This analysis is used to model the value of a dependent categorical variable EU membership based on its relationship to seven predictors as important variables for EU integration. Final results confirm that all EU countries are correctly classified as members of the EU. On the other side, Croatia, Norway, Serbia, Switzerland, Turkey and Ukraine are non EU members, and according to the results, they should be part of the EU. Since Norway and Switzerland are not part of the EU due to non-economic reasons, the analysis points out Croatia, Serbia, Turkey and Ukraine as most suitable candidates for integration in the EU.