The model of entropy metrics and the assessment of socio-economic systems

Abstract

In the context of increasing uncertainty in economic trends and escalating challenges of social issues, this article examines a model of entropy metrics and the assessment of socio-economic systems (SES) based on three criteria: disorder – structural constructiveness, limitation of degrees of freedom – modeling method, and level of uncertainty – informativeness of the object. By combining these criteria, 27 states of socio-economic objects are formed, creating a measurement scale of entropy ranging from H = 0.00 to H = 1.00. The distinctive feature of the proposed measurement scale lies in the fact that, in contrast to the state of deep entropy (H = 1.00), the opposite end of the scale is represented by the constructive model of a socio-economic system (H = 0.00), which has no signs of entropy.

The article discusses three types of models, their features and properties according to the assessment framework, namely: the constructive three-dimensional (3D) SES, serving as a benchmark; the destructive binary model; and the amorphous linear model. Comparing the state of a socio-economic system with the benchmark model made it possible to determine the “distance” from the ideal prototype on the basis of established metrics and to outline a trajectory for prospective development. The interval divisions of the measurement scale set reference points for the improvement of SES through the implementation of constructive methods of managing the interrelations of economic institutions and the interactions of social actors.