Diversity and its decomposition into variety, balance and disparity

Alje van Dam

No 1913, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Diversity is a central concept in many fields. Despite its importance, there is no unified methodological framework to measure diversity and its three components of variety, balance and disparity. Current approaches take into account disparity of the types by considering their pairwise similarities. Pairwise similarities between types do not adequately capture total disparity, since they fail to take into account in which way pairs are similar. Hence, pairwise similarities do not discriminate between similarity of types in terms of the same feature and similarity of types in terms of different features. This paper presents an alternative approach which is based similarities of features between types over the whole set. The proposed measure of diversity properly takes into account the aspects of variety, balance and disparity, and without having to set an arbitrary weight for each aspect of diversity. Based on this measure, the 'ABC decomposition' is introduced, which pro- vides separate measures for the variety, balance and disparity, allowing them to enter analysis separately. The method is illustrated by analyzing the industrial diversity from 1850 to present while taking into account the overlap in occupations they employ. Finally, the framework is extended to take into account disparity considering multiple features, providing a helpful tool in analysis of high-dimensional data.

Keywords: Hill numbers; alpha diversity; beta diversity; entropy; aggregation; mutual information (search for similar items in EconPapers)
JEL-codes: C02 C18 J21 (search for similar items in EconPapers)
Date: 2019-05, Revised 2019-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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