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A Generalized Index of Fractionalization


The goal of this paper is to contribute to the economic literature on ethnic and cultural diversity by proposing a new index that is informationally richer and more flexible than the commonly used ‘ethno-linguistic fractionalization’ (ELF) index. We characterize a measure of diversity among individuals that takes as a primitive the individuals, as opposed to ethnic groups, and uses information on the extent of similarity among them. Compared to existing indices, our measure does not require that individuals are pre-assigned to exogenously determined categories or groups. We show that our generalized index is a natural extension of ELF and is also simple to compute. We also provide an empirical illustration of how our index can be operationalized and what difference it makes as compared to the standard ELF index. This application pertains to the pattern of fractionalization in the United States.

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 78 (2011)
Issue (Month): 312 (October)
Pages: 723-750

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Handle: RePEc:bla:econom:v:78:y:2011:i:312:p:723-750
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  1. Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2002. "Fractionalization," Harvard Institute of Economic Research Working Papers 1959, Harvard - Institute of Economic Research.
    • Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2003. "Fractionalization," NBER Working Papers 9411, National Bureau of Economic Research, Inc.
    • Wacziarg, Romain & Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio, 2002. "Fractionalization," Research Papers 1744, Stanford University, Graduate School of Business.
    • Alesina, Alberto & Devleeschauwer, Arnaud & Wacziarg, Romain & Kurlat, Sergio & Easterly, William, 2003. "Fractionalization," Scholarly Articles 4553003, Harvard University Department of Economics.
  2. Francesco Caselli & Wilbur John Coleman II, 2008. "On the Theory of Ethnic Conflict," CEDI Discussion Paper Series 08-08, Centre for Economic Development and Institutions(CEDI), Brunel University.
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  4. Paola Giuliano, 2005. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," 2005 Meeting Papers 189, Society for Economic Dynamics.
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  9. Bossert, W. & Pattanaik, P.K. & Xu, Y., 2001. "The Measurement of Diversity," Cahiers de recherche 2001-17, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  10. Martin L. Weitzman, 1998. "The Noah's Ark Problem," Econometrica, Econometric Society, vol. 66(6), pages 1279-1298, November.
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  12. Alberto Alesina & Eliana La Ferrara, 2004. "Ethnic Diversity and Economic Performance," Development Working Papers 193, Centro Studi Luca d\'Agliano, University of Milano.
  13. Prasanta K. Pattanaik & Yongsheng Xu,, . "On Diversity and Freedom of Choice," Discussion Papers 97/18, University of Nottingham, School of Economics.
  14. DESMET, Klaus & ORTUNO-ORTIN, Ignacio & WEBER, Shlomo, 2005. "Peripheral diversity and redistribution," CORE Discussion Papers 2005044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  15. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2005. "Cultural Biases in Economic Exchange," 2005 Meeting Papers 234, Society for Economic Dynamics.
  16. Nehring,K. und C.Puppe, 1999. "A Theory of Diversity," Discussion Paper Serie A 605, University of Bonn, Germany.
  17. Hoxby, Caroline & Baqir, Reza & Alesina, Alberto, 2004. "Political Jurisdictions in Heterogeneous Communities," Scholarly Articles 4552532, Harvard University Department of Economics.
  18. Alberto Alesina & Eliana La Ferrara, 2000. "Participation In Heterogeneous Communities," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 847-904, August.
  19. Giuliano, Paola & Spilimbergo, Antonio & Tonon, Giovanni, 2006. "Genetic, Cultural and Geographical Distances," IZA Discussion Papers 2229, Institute for the Study of Labor (IZA).
  20. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
  21. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  22. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  23. José Garcia Montalvo & Marta Reynal-Querol, 2004. "Ethnic polarization, potential conflict and civil wars," Economics Working Papers 770, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2005.
  24. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  25. repec:hrv:faseco:4553034 is not listed on IDEAS
  26. Jos� G. Montalvo & Marta Reynal-Querol, 2005. "Ethnic Polarization, Potential Conflict, and Civil Wars," American Economic Review, American Economic Association, vol. 95(3), pages 796-816, June.
  27. Raquel Fernández & Alessandra Fogli & Claudia Olivetti, 2004. "Mothers and Sons: Preference Formation and Female Labor Force Dynamics," The Quarterly Journal of Economics, MIT Press, vol. 119(4), pages 1249-1299, November.
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