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Concentration of Economic Activity: Inequality-Based Measures

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  • Olga Alonso-Villar
  • Coral Del R�o

Abstract

This paper first reflects on the concentration invariance property that regional economics implicitly assumes when the locational Gini index and the generalized entropy family of concentration indexes are used. Second, it suggests that apart from these indexes, concentration measures based on other inequality notions can be used as well. Thus, this paper proposes a variance-type concentration index and a Lorenz-type dominance criterion that are based on an alternative invariance condition. The use of several invariance notions allows for the exploration of concentration from different angles, which adds robustness to the results, as illustrated by using manufacturing employment data from Spain. RÉSUMÉ Présente communication se penche en premier lieu sur la propriété d'invariance de la concentration, supposée implicitement par l’économie régionale lorsque l'on utilise l'indice de localisation Gini et la famille d'indices de concentration d'entropie généralisés. Elle propose ensuite que, mis à part ces indices, il est également possible d'utiliser des mesures de la concentration basées sur d'autres notions d'inégalité. En conséquence, la présente communication propose un indice de concentration du type à variance, ainsi qu'un critère de dominance du type Lorenz, qui sont basés sur un état d'invariance alternatif. L'emploi de plusieurs notions d'invariance permet l'exploration de concentrations de différents angles, qui renforce la solidité des résultats, comme l'illustre l'emploi de données sur l'emploi dans l'industrie en Espagne. EXTRACTO En primer lugar, este estudio reflexiona sobre las propiedades de invarianza de la concentración que la economía regional asume implícitamente cuando se utilizan el índice locacional de Gini y la familia de entropía generaliza de índices de concentración. En segundo lugar, sugiere que, a parte de estos índices, también pueden utilizarse medidas de concentración basadas en otras nociones de desigualdad. Así este estudio propone un índice de concentración de tipo varianza y un criterio de dominancia de tipo Lorenz que se basan en una condición de invarianza alternativa. El uso de varias nociones de invarianza permite la exploración de la concentración desde diferentes ángulos, lo que aporta solidez a los resultados, como se ilustra con el uso de datos de empleo en fabricación en España.

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File URL: http://hdl.handle.net/10.1080/17421772.2012.669494
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Spatial Economic Analysis.

Volume (Year): 7 (2012)
Issue (Month): 2 (June)
Pages: 223-246

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Handle: RePEc:taf:specan:v:7:y:2012:i:2:p:223-246

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  1. Olga Alonso-Villar & Coral del Río, 2008. "Local versus overall segregation measures," Working Papers 0802, Universidade de Vigo, Departamento de Economía Aplicada.
  2. Jens Suedekum, 2006. "Concentration and Specialization Trends in Germany since Re-unification," Regional Studies, Taylor & Francis Journals, vol. 40(8), pages 861-873.
  3. Karl Aiginger & Michael Pfaffermayr, 2004. "The Single Market and Geographic Concentration in Europe," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 1-11, 02.
  4. Haaland, Jan I. & Kind, Hans Jarle & Ulltveit-Moe, Karen-Helene, 1999. "What Determines the Economic Geography of Europe?," CEPR Discussion Papers 2072, C.E.P.R. Discussion Papers.
  5. Olga Alonso-Villar & Coral del Río, 2009. "Geographic Concentration of Economic Activity: An aggregate index," Working Papers 0901, Universidade de Vigo, Departamento de Economía Aplicada.
  6. Frank Bickenbach & Eckhardt Bode, 2006. "Disproportionality Measures of Concentration, Specialization, and Polarization," Kiel Working Papers 1276, Kiel Institute for the World Economy.
  7. Eleonora Cutrini, 2010. "Specialization and Concentration from a Twofold Geographical Perspective: Evidence from Europe," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 315-336.
  8. Paulo Guimar�es & Octávio Figueiredo & Douglas Woodward, 2007. "Measuring The Localization Of Economic Activity: A Parametric Approach," Journal of Regional Science, Wiley Blackwell, vol. 47(4), pages 753-774.
  9. Ana Muñiz & Antonio Raya & Carmen Carvajal, 2010. "Spanish and European innovation diffusion: a structural hole approach in the input–output field," The Annals of Regional Science, Springer, vol. 44(1), pages 147-165, February.
  10. Joeri Gorter & Albert Van der Horst, 2005. "New Economic Geography, Empirics, and Regional Policy," ERSA conference papers ersa05p236, European Regional Science Association.
  11. Olga Alonso-Villar, 2009. "Measuring geographic concentration: Lorenz curves and their decompositions," Working Papers 0902, Universidade de Vigo, Departamento de Economía Aplicada.
  12. Cutrini, Eleonora, 2009. "Using entropy measures to disentangle regional from national localization patterns," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 243-250, March.
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