Determination of Expert Group Preferences in the Multi-Criteria Model for the Analysis of Local Economic Environment

Abstract

Abstract Local economic environment is characterised by a range of economic, social, political and demographic parameters, based on which we can perform its analysis. Heterogeneity of relevant characteristics of the local economic environment imposes multiple criteria analysis as one of the suitable tools for the evaluation. Assessment of local economic environment often falls within the scope of group decision-making, as it is usually performed on the basis of an analysis of preferences of economic subjects or relevant experts on the issue of the economic environment at the local level. Regardless of whether it is based on economic subjects or expert group, in order to form a multi-criteria model, it is necessary to generate preferences of individuals into a single weight coefficient, which shows groups’ preference on the importance of each criterion. The subject of this paper is determination of weight coefficients in the multi-criteria model for the analysis of local economic development based on the preferences from a group of experts, by applying adequate statistical tools, and then by ranking local governments according to the quality of business environment perceived by the expert group.In addition to descriptive statistics and testing the significance of differences, in the paper is applied multi-criteria method Simple Additive Weights - SAW.