Constructing Composite Indicators with Individual Judgements and Best–Worst Method: An Illustration of Value Measure

In practice, a variety of composite indicators are created using the arithmetic average of different sub-indicators. However, this scheme is typically criticized of the possibility of compensation. For this reason, this paper re-constructs these composite indicators by means of a new methodology. Comprehensive individual judgements among the sub-indicators have been considered to determine the maximum total utilities. Then the best–worst method is introduced to determine the preference associated with various individual judgements. An illustration of Value Measure of health systems is presented to demonstrate the validity and usefulness of our methodology.

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