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Concentration of economic activity: Inequality-based measures

  • Olga Alonso-Villar
  • Coral del Río

This paper reflects about the invariance property that regional economics is implicitly assuming when “relative” inequality measures, such as the Gini index, are used to quantify the geographic concentration of economic activity. In addition, it proposes a new concentration measure that is based on an “absolute” inequality index. The properties of this variance-type index are analyzed. An “absolute” employment Lorenz curve is also proposed to measure concentration, the dominance criterion of which is consistent with this new index. Finally, the usefulness of the new measures is illustrated by using manufacturing employment data in Spain.

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File URL: http://webX06.webs.uvigo.es/sites/default/files/wp1006.pdf
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Paper provided by Universidade de Vigo, Departamento de Economía Aplicada in its series Working Papers with number 1006.

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Length: 34 pages
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:vig:wpaper:1006
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Web page: http://webx06.webs.uvigo.es/
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  1. 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.
  2. 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.
  3. Olga Alonso-Villar & Coral del Río, 2008. "Local versus overall segregation measures," Working Papers 0802, Universidade de Vigo, Departamento de Economía Aplicada.
  4. Jens Suedekum, 2006. "Concentration and Specialization Trends in Germany since Re-unification," Regional Studies, Taylor & Francis Journals, vol. 40(8), pages 861-873.
  5. 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.
  6. 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.
  7. Haaland, J.I. & Kind, H.J. & knarvik, K.H.M. & Torstensson, J., 1998. "What Determines the Economic Geography of Europe?," Papers 19/98, Norwegian School of Economics and Business Administration-.
  8. Frank Bickenbach & Eckhardt Bode, 2006. "Disproportionality Measures of Concentration, Specialization, and Polarization," Kiel Working Papers 1276, Kiel Institute for the World Economy.
  9. Joeri Gorter & Albert Van der Horst, 2005. "New Economic Geography, Empirics, and Regional Policy," ERSA conference papers ersa05p236, European Regional Science Association.
  10. 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.
  11. 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.
  12. Olga Alonso-Villar, 2009. "Measuring geographic concentration: Lorenz curves and their decompositions," Working Papers 0902, Universidade de Vigo, Departamento de Economía Aplicada.
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