METHOD OF ASSESSING THE LEVEL OF ECONOMIC COMMUNITY AS A COMPONENT OF THE REGION

Abstract

A method for assessing the level of economic security of a community as a component of a region has been proposed and substantiated. It has been determined that the economic security of a community is a state of the community’s economic system that ensures: stable functioning of the economy; the ability to withstand risks (crises, war, inflation, unemployment, etc.); a sufficient level of financial self-sufficiency; and the implementation of the community’s strategic development goals. The main components of the community’s economic security have been identified, including: financial, investment and production, market and entrepreneurial, social and demographic, energy and resource, infrastructural, and environmental security (the economic component). A method for assessing the community’s economic security has been proposed, the implementation algorithm of which includes the following stages: preparatory stage – defining the purpose of the assessment, selecting the system of indicators, and determining data sources; data collection – using community statistical reports and other statistical sources; normalization of indicators – bringing indicators to a unified scale (0–1 or 0–100 points); calculation of the integral indicator – combining partial indicators into a general level of economic security;interpretation of results – determining the level of security: critical, low, medium, sufficient, or high. This approach allows for a comprehensive assessment of the current state of the community, identification of internal imbalances and external threats, and determination of its capacity for sustainable development. A hierarchical structure for assessing the level of economic security of a region based on its communities has been presented. To calculate the economic security index, two models are proposed: additive and multiplicative. The additive model assumes that high values of some indicators can compensate for low values of others. That is, a community may have a weak social sector, but high financial indicators may «pull up» the overall index. The multiplicative model is characterized by the fact that a low value of one indicator significantly reduces the overall index. In other words, if one area is in a critical condition, the overall level of economic security sharply declines, even with good results in other areas. The multiplicative model is more complex but more realistic, as it takes into account the interdependence of elements and is more sensitive to weaknesses. The expediency of using both the additive and multiplicative models has been proven: if a community has balanced development, the additive model can be used; if the goal is to identify «vulnerable points», it is advisable to apply the multiplicative model.