Mika Marttunen (firstname.lastname@ymparisto.fi)
Finnish Environment Institute 17.6.2010

Description of Multi-Criteria Decision Analysis (MCDA)

General description

Multi-Criteria Decision Analysis (MCDA), or Multi Criteria Decision Making (MCDM), is a discipline aimed at supporting decision makers who are faced with making numerous and conflicting evaluations. MCDA aims at highlighting these conflicts and deriving a way to come to a compromise in a transparent process. MCDA methods have been developed to improve the quality of decisions involving multiple criteria by making choices more explicit, rational and efficient. The goal is to create a structured process to identify objectives, create alternatives and compare them from different perspectives.

Today MCDA is an established methodology with dozens of books, thousands of applications, dedicated scientific journals software packages and university courses. MCDA applications are diverse and they cover environmental planning, fisheries management, water resources management, forestry, nuclear emergency management, climate policies and life-cycle analysis. MCDA has been applied in many ways and many purposes, e.g. to identify best alternative, to rank alternatives, to assess conflict potential of the alternatives. The potential benefits of the use of MCDA in environmental planning projects are summarized in Fig. 1.

Figure 1. Benefits of MCDA in environmental planning.

Steps of MCDA

The realization of MCDA can be divided into several steps, for instance:

1. Analyze the decision or planning situation

   1. What is the problem?

   2. Who are the key actors (decision makers, stakeholders etc)?

   3. What kind of constraints are there?

OUTCOME of this task: Framing of the problem

2. Identify objectives and alternatives

   1. What kind of objectives different actors have?

   2. What are the possible alternatives and what kind of impacts they have?

OUTCOME of this task: Objectives' hierarchy (Example 1)

3. Define criteria and indicators

   1. What are relevant criteria and indicators in the evaluation of alternatives?

   2. Available information defines what are feasible indicators and scales?

OUTCOME of this task: Refined objectives' hierarchy and list of indicators and scales

4. Assess and describe alternatives' impacts

   1. Analyse and summarize the results of field studies, modelling, questionnaires, interviews etc.

   2. Use expert judgments and local knowledge when needed

OUTCOME of this task: IMPACT MATRIX (Example 2)

5. Find out decision makers'/stakeholders' opinions

   1. What are their opinions related to alternatives' impacts and their significance

   2. Questionnaires/interviews can be applied

OUTCOME of this task: Respondents preference information (Example 3)

6. Use MCDA software (not necessary step)

   1. Combine the impact data and respondents' values

   2. There are several software available e.g. Web-HIPRE (http://www.hipre.hut.fi)

OUTCOME of this task: Overall priority values for the alternatives for each respondent or group (Example 4)

7. Analyze the results and realize the sensitivity analysis

   1. What are major issues of agreement and disagreement?

   2. What are the most liked and disliked alternatives and why?

OUTCOME of this task: Illustrative figures and tables

Example of the possible use of MCDA method: Comparison of alternative hydro power development options.

There are many ways to realize one hydro power development project. Different options have different costs, advantages and disadvantages. MCDA can help to synthesize and utilize efficiently the existing information about the alternatives' ecological, social and economic impacts. E.g. results of modelling, field studies, expert judgment and local knowledge can be included in the analysis. MCDA highlights the subjectivity of the evaluation process. People who are involved in the MCDA process can express their opinions about the impacts and their significance. This information is utilized when the priority values for alternatives are calculated. The outcome of the analysis is ranking of alternatives based on the impact assessment information and the evaluator´s values.

Example figures and tables

Example 1. A hypothetical scheme of potential stakeholders, criteria, subcriteria and indicators realted to hydro power development projects.

Example 2. A hypothetical impact matrix

Example 3. Defining weights for the criteria. An example of the questions which are presented in the MCDA (the view is from Web-HIPRE software).

Example 4. Overall priority values for alternative in the Web-HIPRE analysis. The higher the bar the more preferred the alternative is from evaluator's point of view.