Inequality foundations of concentration measures: An application to the Hannah-Kay indices
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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Volume (Year): 4 (2002)
Issue (Month): 4 ()
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- 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.
- 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.
- Marfels, Christian, 1971. "Absolute and Relative Measures of Concentration Reconsidered," Kyklos, Wiley Blackwell, vol. 24(4), pages 753-766.
- 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.
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