Digital Platforms and Composite Measurement of an Urban Circular Economy: Developing the Digital Circularity Index ​

Digital platforms are increasingly central to advancing the circular economy in urban contexts. However, current measurement tools rarely capture the complexities linking digital adoption, environmental performance, and socio-economic factors, leaving a significant gap between theory and practice. To address this gap, this study develops the Digital Circularity Index (DCI), a novel composite indicator that analyses and compares urban circularity by integrating digital platform adoption, waste-management outcomes, and contextual socio-economic variables. Using data from Italy’s 14 metropolitan cities, we construct the DCI using partial least squares path modelling (PLS-PM), which accommodates theoretical relationships across dimensions and yields interpretable, reliable weights for each indicator. The results reveal significant disparities across cities, demonstrating how balanced integration of digital engagement, environmental practices, and socio-economic capacities increases circularity. The DCI advances research by offering a multi-dimensional measure of urban circularity that explicitly integrates digitalisation and provides valuable insights for policymakers. The DCI is a replicable decision-support tool for monitoring urban circularity and guiding investment strategies.