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A composite indicator is formed when individual indicators are compiled into a single index, on the basis of an underlying model of the multi-dimensional concept that is being measured.

A composite indicator measures multi-dimensional concepts (e.g. competitiveness, e-trade or environmental quality) which cannot be captured by a single indicator. Ideally, a composite indicator should be based on a theoretical framework / definition, which allows individual indicators / variables to be selected, combined and weighted in a manner which reflects the dimensions or structure of the phenomena being measured.

Source Publication:
OECD, 2004, “The OECD-JRC Handbook on Practices for Developing Composite Indicators”, paper presented at the OECD Committee on Statistics, 7-8 June 2004, OECD, Paris.

Cross References:
Composite leading indicators (CLI)

Statistical Theme: Methodological information (metadata)

Created on Friday, December 10, 2004

Last updated on Wednesday, December 11, 2013