Inequality Foundations of Concentration Measures: An Application to the Hannah-Kay Indices
Oscar Bajo-Rubio () and
Rafael Salas ()
No 9901, Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra from Departamento de Economía - Universidad Pública de Navarra
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 an 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 illustrates the sources of a change in sectoral concentration between two points in time.
Keywords: Concentration; inequality (search for similar items in EconPapers)
JEL-codes: D63 L11 (search for similar items in EconPapers)
Pages: 13 pages
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Journal Article: Inequality foundations of concentration measures: An application to the Hannah-Kay indices (2002)
Working Paper: Inequality foundations of concentration measures: an application to the hannah-kay indices (1999)
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