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Concentration of economic activity: Inequality-based measures

Olga Alonso-Villar and Coral del Rio Otero ()

No 1006, Working Papers from Universidade de Vigo, Departamento de Economía Aplicada

Abstract: 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.

Keywords: Inequality measures; Geographic concentration; Axioms (search for similar items in EconPapers)
JEL-codes: R12 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo
Date: 2010-11
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