Articles | Open Access | https://doi.org/10.55640/business-abc418

COMPREHENSIVE REVIEW OF CONSTRUCTING COMPOSITE INDICATORS USING MULTICRITERIA METHODS

Abstract

Composite indicators play a pivotal role in summarizing complex phenomena into single measures for decision-making and policy formulation across various domains. This paper provides a comprehensive review of constructing composite indicators using multicriteria methods. Multicriteria methods offer a systematic approach to aggregating diverse indicators, each representing different dimensions of a phenomenon, into a unified composite index. The review explores key concepts, methodologies, and applications of multicriteria methods in constructing composite indicators. It discusses the underlying principles, such as weighting, normalization, and aggregation techniques, employed in multicriteria decision-making. Furthermore, the review examines the strengths, limitations, and best practices associated with multicriteria methods in constructing composite indicators. Insights from the review contribute to enhancing the understanding of the theoretical foundations and practical applications of multicriteria methods in composite indicator construction across various fields.

 

Keywords

Composite indicators, Multicriteria methods, Aggregation techniques

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Trinidad Ruiz. (2021). COMPREHENSIVE REVIEW OF CONSTRUCTING COMPOSITE INDICATORS USING MULTICRITERIA METHODS. International Interdisciplinary Business Economics Advancement Journal, 2(04), 07-13. https://doi.org/10.55640/business-abc418