Developing a projects evaluation system based on multiple attribute value theory

This paper presents the development process of an evaluation system to help the Portuguese Public Administration to choose a portfolio of projects for financing within the scope of Measure 1.5 of the Operational Program of the Portuguese Centro Region. The theoretical tool used is multiple attribute value theory, which focuses on the prescription of decisions in non-structured multiple objective decision scenarios. Problem structuring involved defining objectives in agreement with national development program and European Community policies, and attributes to measure the achievement of projects with respect to them. The approach required the assessment of value functions for each of the attributes, validation of independence conditions of decision makers and, finally, the aggregation of single attribute value functions into an overall multiple attribute value function (OMVF). All these structuring steps were carried out based on the preferences of a panel of decision makers with wide experience in managing and selecting projects within similar programs. The system developed, supported by a computer interface, is nowadays used to measure the appropriateness of projects to regional development goals; a project is chosen for financing if its value achieves the threshold. A portfolio of four projects embracing a range of characteristics rich enough to conclude about its performance illustrates its application. (c) 2004 Elsevier Ltd. All rights reserved.