Constructing Composite Indicators with Collective Choice and Interval-Valued TOPSIS: The Case of Value Measure

This paper is concerned with proposing a new mechanism to re-construct the published composite indicators that are conventionally aggregated in terms of equal weighting scheme, by means of taking all possible preferences among the indicators into account. Regarding to each preference, we apply a sophisticated mathematical transformation to formulate an interval metric. Inspired by the collective choice theory that integrates individual preference into social preference, an interval decision matrix is therefore formulated with preference as column. An interval-valued TOPSIS procedure in conjunction with Shannon entropy objective weights is applied to re-build composite indicators. The proposed methodology is illustrated by modifying the value measure of health systems. The Spearman’s rank correlation coefficients between Access, Satisfaction, Efficiency and two versions of value measure are calculated to perform the comparisons and demonstrate the superiority of our methodology.