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Inequality foundations of concentration measures: An application to the Hannah-Kay indices

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Author Info
Oscar Bajo () (Universidad de Castilla-La Mancha, Departamento de Economía y Empresa, Ronda de Toledo s/n, 13071 Ciudad Real, Spain Universidad Complutense de Madrid, Departamento de Fundamentos del Análisis Económico I, Campus de Somosaguas, 28223 Madrid, Spain)
Rafael Salas () (Universidad de Castilla-La Mancha, Departamento de Economía y Empresa, Ronda de Toledo s/n, 13071 Ciudad Real, Spain Universidad Complutense de Madrid, Departamento de Fundamentos del Análisis Económico I, Campus de Somosaguas, 28223 Madrid, Spain)

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Abstract

The aim of this paper is to provide a connection between concentration and inequality. In particular, we show that the general entropy inequality indices are, among inequality measures, those consistent with the whole set of Hannah-Kay concentration indices. We isolate the inequality component underlying concentration measures, obtaining an explicit additive decomposition of the change in concentration into the change in its two components, i.e., inequality and the number of firms. This relationship proves to be valid for the whole set of Hannah-Kay concentration indices, and embodies as particular cases some others previously found in the literature.

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Publisher Info
Article provided by Springer in its journal Spanish Economic Review.

Volume (Year): 4 (2002)
Issue (Month): 4 ()
Pages: 311-316
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Handle: RePEc:spr:specre:v:4:y:2002:i:4:p:311-316

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Related research
Keywords: Concentration; inequality;

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Find related papers by JEL classification:
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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  1. Encaoua, David & Jacquemin, Alexis, 1980. "Degree of Monopoly, Indices of Concentration and Threat of Entry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 87-105, February. [Downloadable!] (restricted)
  2. Marfels, Christian, 1971. "Absolute and Relative Measures of Concentration Reconsidered," Kyklos, Blackwell Publishing, vol. 24(4), pages 753-66.
  3. Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April. [Downloadable!] (restricted)
  4. Salas, Rafael, 1998. "Welfare-consistent inequality indices in changing populations:: The marginal population replication axiomA Note," Journal of Public Economics, Elsevier, vol. 67(1), pages 145-150, January. [Downloadable!] (restricted)
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  1. Frederico Rocha & Sálua Bueno & Luiza Nassif Pires, 2007. "Dinâmica Da Concentração De Mercado Na Indústria Brasileira, 1996-2003," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 141, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
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