3.1 Composite indicators

Question 1

What are some advantages of composite indicators?

Answer 1

The advantages of composite indicators are that they are :

1. They take a better picture of an overall country’s development as they take into account multiple indicators.
2. They can be easily mapped. This allows for easier comparison between countries.

Question 2

What are some disadvantages of composite indicators?

Answer 2

The disadvantages of composite indicators are:

1. They can become misleading if poorly constructed (e.g. a country may have a good income but low access to healthcare which may influence its score)
2. The big picture they form can mask internal inequalities and variations between regions.
3. Some of the data needed to calculate them can be missing.
4. They often do not take into account an environmental indicator. e.g. the HDI

Question 3

What is an example of a composite indicator?

Answer 3

The HDI- Human development index.