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Concentration of Economic Activity: Inequality-Based Measures

Author

Listed:
  • Olga Alonso-Villar
  • Coral Del RÍo

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.

Suggested Citation

  • Olga Alonso-Villar & Coral Del RÍo, 2012. "Concentration of Economic Activity: Inequality-Based Measures," Spatial Economic Analysis, Taylor & Francis Journals, vol. 7(2), pages 223-246, June.
  • Handle: RePEc:taf:specan:v:7:y:2012:i:2:p:223-246
    DOI: 10.1080/17421772.2012.669494
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    References listed on IDEAS

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    1. Mary Amiti, 1999. "Specialization patterns in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(4), pages 573-593, December.
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    More about this item

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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