Construction of an index by maximization of the sum of its absolute correlation coefficients with the constituent variables
نویسنده
چکیده
I. Introduction: On many occasions we need to construct an index that represents a number of variables (indicators). Cost of living index, general price index, human development index, index of level of development, etc are some of the examples that are constructed by a weighted (linear) aggregation of a host of variables. The general formula of construction of such an index (OECD, 2003) may be given as
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