The positional MEF-TOPSIS method for the assessment of complex economic phenomena in territorial units

Aleksandra Łuczak; Małgorzata Just

doi:10.21307/stattrans-2020-018

The positional MEF-TOPSIS method for the assessment of complex economic phenomena in territorial units

Aleksandra Łuczak Faculty of Economics and Social Sciences, Poznań University of Life Sciences, Poland ORCID:https://orcid.org/0000-0002-3149-7748 , Małgorzata Just Faculty of Economics and Social Sciences, Poznań University of Life Sciences, Poland ORCID:https://orcid.org/0000-0001-7655-6046 Statistics in Transition new series, vol. 21, 2020, 2, pages: 157-172 Published online: 5 June 2020 DOI 10.21307/stattrans-2020-018

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ARTICLE

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ABSTRACT

In this paper, the authors propose a new methodological approach to the construction of a synthetic measure, where the objects are described by variables with strong asymmetry and extreme values (outliers). Even a single extreme value (very large or very small) of a variable for the object may significantly affect the attribution of an excessively high or low rank in the final ranking of objects. This dependence is particularly apparent when using the classical TOPSIS (Technique for Order of Preference by Similarity to Ideal Solution) method. The aim of the study is to present the application potential of the positional MEF-TOPSIS method for the assessment of the level of development of complex economic phenomena for territorial units. In the positional TOPSIS method, the application of the spatial median of Oja, which limits the impact of strong asymmetry, is proposed. In order to weaken the influence of extreme values, the Mean Excess Function (MEF) is used, by means of which it is possible to identify the limits of extreme values and establish model objects. The proposed approach is used to assess the financial self-sufficiency of Polish municipalities in 2016. The study finally compares the results of applications of positional MEF-TOPSIS and the classic and positional TOPSIS methods.

KEYWORDS

synthetic measure, TOPSIS, spatial median of Oja, Mean Excess Function

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