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Composite Index Construction
The process of combining multiple indicators into a single index, often used in economic and social research to measure complex concepts like quality of life or brand strength.
Implications
The process of creating a single index from multiple indicators or metrics, often used to summarize complex data and provide a comprehensive measure of performance or conditions.
Example
Example: An economic research firm constructs a composite index to track the overall health of the housing market by combining indicators such as home prices, mortgage rates, and construction activity.
Related Terms
Different from a single metric analysis, composite index construction provides a broader, more holistic view by combining several indicators into one measure.
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