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Inequality foundations of concentration measures: an application to the hannah-kay indices

Rafael Salas () and Oscar Bajo-Rubio ()

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: In this paper we provide a connection between concentration and inequality by showing that the inequality measures consistent with the whole class of Hannah-Kay concentration indices are the general entropy inequality indices. We isolate the inequality component underlying the concentration measures, obtaining and explicit additive decomposition of the change in concentration into the change in its two components: inequality and the number of firms. This relationship proves to be valid for the whole class of Hannah-Kay concentration indices, and embodies as particular cases other previously found in the literature. Finally, our proposed decomposition is shown by means of an empirical example, which ilustrates the sources of a change in sectoral concentration between two points in time.

Keywords: Concentrations; Inequality (search for similar items in EconPapers)
Date: 1999-02
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Related works:
Journal Article: Inequality foundations of concentration measures: An application to the Hannah-Kay indices (2002) Downloads
Working Paper: Inequality Foundations of Concentration Measures: An Application to the Hannah-Kay Indices (1999) Downloads
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