Construction of Composite Indices in Presence of Outliers

I. Introduction: Oftentimes we require constructing composite indices by a linear combination of a number of indicator variables. If we denote the indicator variables by 1 2 [ ,,...,]mX x x x = where each jx has n observations (cases) and weights assigned to those variables by 1 2 [ ,,...,]mw w w w ′ = then the composite index I Xw = obtains a singl