Application of synthesis indexes (SI) to the port sustainable development measurement: A critical review

CELEBRATE VIET NAM TEACHERS’ DAY 20/11/2018

APPLICATION OF SYNTHESIS INDEXES (SI) TO THE PORT SUSTAINABLE
DEVELOPMENT MEASUREMENT: A CRITICAL REVIEW
VU THANH TRUNG
Faculty of Maritime Business, Vietnam Maritime University
Abstract
Measuring sustainable development of port has been the major concern of many
academics in a last few decades. Sustainable development is multidimensional issues so
that it needs to be assessed in three dimensions, namely, economic, social and
environmental dimensions. Therefore, properly measuring sustainability in all aspects
seems to be difficult. The reason is that there is not a single benchmark for assessing all
these facets of sustainability as variables employed in evaluating the three facets are
distinct. A solution for this issue is applying synthesis indexes (SI) to evaluate maritime
ports sustainability. This research will provide a critical review of the use of SI in
sustainability evaluation. This method can be applied to evaluate different aspects of
maritime port sustainable development and also analyzing the relationship between them.
Keywords: Sustainable development, port, synthesis indexes.
Tóm tắt
Đo lường sự phát triển bền vững của cảng vấn đề thu hút được nhiều sự quan tâm của
các nhà nghiên cứu trong vòng một vài thập kỷ gần đây. Phát triển bền vững là một vấn
đề đa chiều do đó cần phải được đánh gái trên ba khía cạnh, kinh tế, xã hội và môi
trường. Từ đó thấy được đo lường cả ba khía cạnh của sự bền vững là một công việc khó
khăn vì không có một thang đo cụ thể nào có thể sử dụng để đo lường tất cả các khía
cạnh của sự bền vững. Nguyên nhân đó là tiêu chí sử dụng để đo lường từng khía cạnh
của sự bền vững là khác nhau. Giải pháp cho vấn đề này đó chính là áp dụng phương
pháp chỉ số tổng hợp để đánh giá sự phát triển bền vững của các cảng biển. Bài báo sẽ
cung cấp nghiên cứu tổng hợp về cách sử dụng chỉ số tổng hợp (SI) để đánh giá sự phát
triển bền vững. Phương pháp này có thể được áp dụng để đánh giá từng khía cạnh khác
nhau của phát triển bền vững của cảng biển đồng thời có thể phân tích được mối quan
hệ giữa các khía cạnh này.

Keywords: Phát triển bền vững, cảng, chỉ số tổng hợp.
1. Introduction
Sustainable development has attracted the great deal of attention of not only firm managers
but also many researchers in a last few decades. The concept of sustainable development implies
the relationship between economic development, social equality and environmental quality. This
idea was introduced in 1972 and has evolved over years. Sustainable development can be defined
as “Development that meets the needs of the present without compromising the ability of the future
generations to meet their own needs” [1]. Another definition of sustainability commonly used
among scholars and managers is that sustainability is comprised of economic growth, social
improvement (equality, poverty alleviation and job creation) and environment protection. In short,
sustainable development is comprised of three aspects: economic, environmental and social
improvement. It is very important to give equal attention to each component to achieve sustainable
outcome.
In the port manager perspective, the port sustainable development can be understood as the
development that brings about economic growth, creates a number of job for the locals and
improve their standard of living, makes an increasingly higher contributions to the state budget,
supports other local firms, increases national security and protects local as well as national
ecosystem [2]. It is widely recognized that individuals, societies and government have to find tools
and models to assess the sustainability of their activities. The reason is that sustainability
evaluation is important as it is the useful guidance for ports to achieve sustainable development.
Furthermore, Kates et al (2001) [3] state that the aim of sustainability assessment is assisting
policy makers to take appropriate actions to make society sustainable by providing an evaluation of
integrated nature- society system in short run as well as in long run.
Therefore, this paper provides the review of the applications of one of the newly introduced
method is known as Port Sustainability Synthetic Indices (SI) in different contexts. In fact, this
method can be used to qualitatively measure the port sustainability by employing different
variables. That means, number of variables employed in measuring the sustainability are not fixed
and they depend on the availability of the variables, researcher purposes and economic context.
Therefore, the article will review the use of SI in different situations. In addition, SI not only allows
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managers and researchers to assess components of sustainable development separately but also
compare them. Consequently, to provide empirical evidence for port’s sustainable development
strategic planning.
2. Literature review of sustainability measurement
There have been numerous researches on the field of port sustainable development since
the beginning of 21th century. However, there are very few methodological contributions to attempt
to quantitatively measure maritime port sustainability. The sustainability of ports can be assessed
by using SWOT matrix. This approach provides many qualitative empirical evidence of what have
been happening in particular port and port system of given region [4]. Besides that, multi-criteria
decision making – MCDM and Analytical Hierarchy Process – AHP are commonly used to evaluate
the port sustainable development [5], [6]. Another model commonly used to examine the
sustainable development of ports in term of geographical location is Bird’s any port model and its
modified models [6], [7], [8] . There are many modified models of ports development in Western
countries as well as Eastern countries based on Bird’s any port model for sustainability
assessment. In addition, creating sustainability indicators based on efficiency standpoints is also a
method used to assess sustainability of sea ports [12], [13]. These studies use data envelopment
analysis (DEA) technique to derive indicators from input - output data. Furthermore, there are some
other assessment methods used in evaluating the port sustainable development such as
Confirmatory Factor Analysis - CFA measuring sustainable development by using 31 sub-indicators
grouped into four categories, namely, environmental material, economic issue, environmental
practices and social concern [14], [15].
Although, the scholars have used many different methodologies to measure sustainability,
these methods seem not to provide rigorous sustainability measurements. Most of the studies

mentioned above are not prior to evaluate all three dimensions of sustainable development
simultaneously but separately. A facet of sustainable development that attracts the most attentions
of the scholars is environment. A number of studies focus on impacts of environmental policies on
environment surrounding ports. They aim to evaluate the effects of environmental policies
application on quality of ports environment in ASEAN [16] and in some countries in EU [17], [18],
[19]. Nonetheless, other researches measure the damage on environment by comparing the
empirical data such as the amount of greenhouse gases resulted from ports operation with the
appropriate benchmarks [20], [21]. Besides, geographical location is also assessed in order to
achieve the sustainable development [11], [22]. Environmental and economic aspects can be
evaluated at the same time and its resultant tradeoff between environmental and economic benefits
[5], [23]. Some articles can make assessments of the maritime port sustainable development based
on evaluating three aspects of sustainability [14], [15] but the indicators are not comparable.
The approach that has been recently used is Port Sustainability Synthetic Index. The method
provides a measurement of multidimensional concepts - sustainable development. Furthermore,
the SI has some advantages such as providing holistic view of the linkage between three
dimensions of sustainable development and able to analyze many types of information by using
adaptive and frequently updated indicators. Therefore, it solves the problem that variables
sometime are incomparable because of different unit of measurement by providing the synthetic
index converting all different unit of measurement into one. This, in turn, also allows a comparison
among different aspects of sustainability [23], [24].
3. Synthetic Indexes (SI) approach
Synthetic Indexes are commonly used in economics to calculate aggregate information from
a set of grouped variables. The variables are classified into different group of different levels of
hierarchy. It is acceptable for measuring a complex and multidimensional issues. Comparing
different economic, social and environmental realities seems to offers irrelevant findings because
they measure different facets of sustainability. However, sustainability is complex and
multidimensional issue and required to be assessed in all dimensions. Therefore, synthetic indexes
(SI) that are composite indexes of individual, grouped and weighted variables are appropriate for
multidimensional concepts. This allows policy makers to conduct a full analysis of realities.
Resultantly, it can help policy makers to make decision concerning individual aspect as well as

integral aspects [23].
In general, there are several steps to obtain an SI including:
 Step 1: Generating an initial database. This step includes a selecting a set of variables to
form definitive database. These variables have to be present in form of quantitative and relative

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values so that it allows a comparison between variables. The categorical or qualitative values are
not acceptable.
 Step 2: Identifying and selecting the important variables. The final database is made from
subset of definitive database after removing all irrelevant variables.
o Dimension where the variables belong
o Indicator that the variables fit
o Definition and description of the variables
o Source of the information
o Calculation method
 Step 3: The values of the dimensions are generated following the procedure below
o Correcting the outliers of the variables if it is necessary
o Typifying the corrected values
o Grouping them according to indicators and converting them into standard normal
percentiles with values ranging from 0 to 100.
o SI values will be calculated by weighting the average of the percentiles that are obtained
for each dimension or component of index.
In order to measure the sustainable developments of ports by using SI, the set of variables

have to be identified based on the research objects - sustainability measurement. Afterwards, the
selected variables have to be grouped in three main categories that are three dimensions of
sustainable development, namely, economic, social and environmental dimensions.
Laxe et al (2016, 2017) states that three dimensions can be measured by employed the set
of variables including economic structure and business and services for economic dimension,
social capital, human capital, fairness and health for social dimension, environmental management,
eco-efficiency and environmental quality for environmental dimension [23], [25]. The variables used
to assess the environment aspect of sustainability by Laxe et al are similar to those are employed
for evaluating environmental aspect of ports in Taiwan [26] and Vietnam and Cambodia [16] (Table
1). In general, the similarity between these studies is that the sustainability is seen through point of
view of the port manager. Therefore, the variables employed will measure how well the ports
economically, socially and environmentally perform.
Table 1. Indicators and sub-indicators for the sustainability measurement

Indicator
Economic
aspect

Social aspect

Environmental
aspect

Economic structure
Business and services
Social capital
Human capital
Fairness
Health
Environmental

management
Eco-efficiency
Environmental quality

Sub-indicator
Value generated and productivity, economic and
financial situation
Business, services
Employment
Training
Gender equality
Labor structure, occupational accidents, health
Economic behavior in environmental issues
Environmental training, efficiency in resources use
Water consumption and water quality

According to Asgari et al (2015) there are some other variables might be involved in the
definitive database as below (Table 2) [5]. Asgari et al stand in the policymaker perspective, they
measure sustainability of the ports by employing variables related to policy implementations.
Table 2. Indicators for the economical - environmental measurement

Economic
dimension
Indicator
Cost efficiency
Hight quality
services

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Environmental Dimension
Indicator
Establish environmental policies
Identifying environmental impacts
Identifying environmental objectives and
priorities

Develop environmental
concepts
Training and awareness
Emergency preparedness and
response

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In the local government perspective, port development is considered to be sustainable when
it contributes to the growth of local economy, improvement of local community and preservation of
local environment [27], [28]. They also propose some variables that should be employed to
evaluate three dimensions of sustainability. These are shown in Table 3.
Table 3. Indicators and sub-indicators for the economic and environmental measurement

Indicator
Economic aspect
Social aspect
Environmental aspect

GDP and tax generation, productivity, profitability and income
Spatial impact on community, quality of living & working environment
Employment impact, heritage and cultural impact
Water quality, air quality, coastal and maritime environment
Waste management

Researchers can form a definitive database with all these variables mentioned above. After
forming the definitive database, it will be further narrowed down depending on real economic
circumstances to make final database. When the final database is formed and all indicators are
classified into three dimensions of sustainable development, the process of analysis will be carried
out following 4 steps:
 First step: Collecting the observed values of all variables;
 Second step: calculating Z-scores, this step will typify variable and make them comparable;
 Third step: values of percentiles 97.5 and 2.5 will be removed to avoid distorting the results
under effect of extreme values;
 Final step: the final step has some sub-steps involved:
o Values reaching 97.5 and 2.5 percentile will be corrected;
o Calculating the simple average of the Z-scores of the variables to obtain adjusted value of
typified variable of each variable;
o Calculating the final values of each dimensions of sustainability based on weighted
average of typified variable of the indicators.
4. Conclusion
There are numerous research papers shading light on the maritime ports sustainability in the
last few decades. The question related to this field that has been raised is how the scholars can
properly measure the sustainability of port. An application of SI is considered to be an answer for
the question because it provides a holistic approach to port sustainability assessment by employing
indicators that can be adapted for different research scopes. In other words, port sustainability can
be properly measured in all three dimensions and more by using synthetic indexes. However, each
dimension cannot be measured by employing the same variables because researchers with
different point of views concern particular development issues. Therefore, they select the different

set of variables. This paper will assist the researchers and managers to find an appropriate set of
variables with the critical review of the applications of SI in different context. The number of
variables employed will depends on the purpose of the researchers and the availability of these
variables. There is the review of some proposed variables that can be used to measure the
sustainability. Nonetheless, these quantitative measurements are comparable so that the
achievements of port in the three aspects can be compared. This is crucial for policy makers
because it will provide an empirical evidence for them to propose appropriate development strategy
in order to achieve not only an improvement in any particular aspects of sustainability but also
three aspects altogether.
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Received:
Revised:
Accepted:

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10 January 2018
08 March 2018
10 May 2018

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