Normalising standardising the indicators

There are many techniques used to normalise the indicators and each technique has its own advantages and disadvantages. These techniques depend on data availability, sample size of countries and the expected (wanted) influence of variables in the final index. The most common methods used in normahsation data of international indices are the general linear transformations techniques that are listed below for the first three methods, while the other methods use special techniques  

1) Distance between the actual value and the best and worst values. It depends on whether the safety level has an increasing or decreasing rate of in the change in the values of an indicator. For example, by normalising the indicator paved roads I use the formula  

3) Distance to the target/goal (estimated value ahead) or to the maximum value. If the minimum value in the formula (5.1) is zero, we will arrive at these formulas as well  

4) Normalisation to the previous year by dividing the value from one year to the next (percentage annual change). One example of this technique is the Index of Economic Well-Being (Saisana and Tarantola, 2002). 

5) Normalisation to the standard deviation, which assumes a normal distribution to the data with mean zero and unit standard deviation. This technique is commonly applied in multivariate methods (e.g. principal components)  

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