Methodological Problems of Formation and Application of Composite Territorial Indices

The article discusses the problems of improving the methodology for constructing composite territorial indices, as well as solving practical problems for their use in managing the socio- economic development of countries and regions. It is shown that, at their core, composite indices, by aggregating a significant array of diverse information, provide an opportunity for an analytical assessment of the current situation in a region (country), comparison of a territory’s position relative to other regions, and construction of analytical regional ratings. Despite the frequency of use, the questions of the applicability of composite indices, the specifics of the methods for their construction, and the objectivity of the estimates obtained on their basis remain unclear. It is shown that at each stage of calculating index estimates there are a number of problems and assumptions that impose restrictions on their use in statistical and economic analysis. The main problems include poor comprehensiveness of assessments, low comparability of information and lack of unambiguous interpretation of results (especially at the regional level), poor representativeness of information and results for international comparisons, and «incompleteness» of the national statistical system (especially at the municipal level). Lack of unified generally accepted indicators of territorial development and widespread use of expert assessments. The latter often leads to excessive labor intensity and subjectivity of calculations. Particular attention is paid to the issues of modifying the use of integral indices for the purposes of regional policy. The work shows that in the absence of real alternatives to integral indices, on the basis of which series of rating comparisons are then built, it is necessary to continue working on their improvement in order to use them as regional diagnostic tools and factors for making strategic management decisions