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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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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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  1. Frank Bickenbach & Eckhardt Bode, 2006. "Disproportionality Measures of Concentration, Specialization, and Polarization," Kiel Working Papers 1276, Kiel Institute for the World Economy.
  2. 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.
  3. Alonso-Villar, Olga & del Río, Coral, 2010. "Local versus overall segregation measures," Mathematical Social Sciences, Elsevier, vol. 60(1), pages 30-38, July.
  4. Suedekum, Jens, 2004. "Concentration and Specialisation Trends in Germany since Reunification," HWWA Discussion Papers 285, Hamburg Institute of International Economics (HWWA).
  5. 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.
  6. Joeri Gorter & Albert Van der Horst, 2005. "New Economic Geography, Empirics, and Regional Policy," ERSA conference papers ersa05p236, European Regional Science Association.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  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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