Learning preferences through the TOPSIS method: an application for economic freedom ratings

• Diogo Lima Silva UFPE
• Julio Cezar Silva UFPE
• Adiel de Almeida Filho UFPE

DOI: https://doi.org/10.5753/semish.2020.11318

Abstract

This article presents the application of a multicriteria classification method, which uses preference learning, to allocate a set of 180 countries in 5 classes of economic freedom. The classes were pre-defined and ordered, which characterizes a sorting problem. In the application, choices of reference alternatives were simulated. Then, the results were compared to the classification carried out by a specialized agency. The method obtained consistent results, with a similarity percentage higher than 85%.

Keywords: preference learning, economic freedom, multicriteria classification

References

Behzadian, M., Khanmohammadi Otaghsara, S., Yazdani, M., & Ignatius, J. (2012). A state- of the-art survey of TOPSIS applications. Expert Systems with Applications, 39(17), 13051–13069.

de Lima Silva, D. F., & de Almeida Filho, A. T. (2020). Sorting with TOPSIS through boundary and characteristic profiles. Computers & Industrial Engineering, 141, 106328.

de Lima Silva, D. F., Ferreira, L., & de Almeida-Filho, A. T. (2020). A new preference disaggregation TOPSIS approach applied to sort corporate bonds based on financial statements and expert’s assessment. Expert Systems with Applications, IN PRESS.

Doumpos, M., & Zopounidis, C. (2014). Multicriteria Analysis in Finance (1st ed.). Springer International Publishing.

Greco, S., Ehrgott, M., & Figueira, J. R. (Eds.). (2016). Multiple Criteria Decision Analysis: State of Art Surveys (2nd ed., Vol. 233). New York, NY: Springer New York.

Greco, S., & Kadziński, M. (2018). Feature cluster: Learning perspectives in Multiple Criteria Decision Analysis. European Journal of Operational Research, 264(2), 403– 404.

Greco, S., Matarazzo, B., & Slowinski, R. (2001). Rough sets theory for multicriteria decision analysis. European Journal of Operational Research, 129(1), 1–47.

Heritage Foundation (2020). Index of Economic Freedom, accessed February 24, 2020, available at https://www.heritage.org/index/.

Jacquet-Lagrèze, E., & Siskos, Y. (2001). Preference disaggregation: 20 Years of MCDA experience. European Journal of Operational Research, 130(2), 233–245.

Mousseau, V., & Slowinski, R. (1998). Inferring an ELECTRE TRI Model from Assignment Examples. Journal of Global Optimization, 12(2), 157–174.

Ouenniche, J., Pérez-Gladish, B., & Bouslah, K. (2018). An out-of-sample framework for TOPSIS-based classifiers with application in bankruptcy prediction. Technological Forecasting and Social Change, 131(May 2017), 111–116.

Pardalos, P. M., Siskos, Y., & Zopounidis, C. (Eds.). (1995). Advances in Multicriteria Analysis (Vol. 5). Boston, MA: Springer US.

Roy, B. (1996). Multicriteria methodology for decision aiding. Kluwer Academic Publishers.

Zopounidis, C., Galariotis, E., Doumpos, M., Sarri, S., & Andriosopoulos, K. (2015). Multiple criteria decision aiding for finance: An updated bibliographic survey. European Journal of Operational Research, 247(2), 339–348.