TITLE

NUMBERS-EQUIVALENTS IN U.S. MANFACTURING INDUSTRIES: 1954, 1958, AND 1963

AUTHOR(S)

Horowitz, Ira

PUB. DATE

April 1971

SOURCE

Southern Economic Journal;Apr71, Vol. 37 Issue 4, p396

SOURCE TYPE

Academic Journal

DOC. TYPE

Article

ABSTRACT

The industrial organization analyst is not lacking in measures of industrial concentration. In addition to the oft-used concentration ratio, Gini coefficient [14, 48-51], and Herfindahl index [7], alternative measures sporadically appear, but these commonly fail to command wide-spread attention and are usually relegated to a passing reference.[15] Entropy and its associated numbers-equivalent are measures of concentration that have received more attention than any of the other recently proposed alternatives to the classical measures. This attention stems from the undisputable fact that entropy is a valid measure of concentration; and, moreover, it is a measure that has a solid theoretical foundation and a variety of attractive 15 For two of the most recent entries see [5] and [13]. and useful properties. The other side of the coin is the argument that, as with these other alternatives, entropy does not indicate anything about concentration that has not already been revealed by the widely available and familiar concentration ratio to whose use we have grown accustomed.
In this paper we have attempted to demonstrate--empirically--that entropy often will lead to inferences about concentration that differ from those encouraged by the concentration ratio. We have also attempted to show that even in the absence of the microeconomic data, accurate estimates of entropy are ordinarily obtainable from published grouped data, and when these estimates are translated into their associated numbers-equivalents, the result is a series of readily understood figures that offer a unique insight into market structure.

ACCESSION #

5194304

Tags: INDUSTRIAL concentration;  GINI coefficient

 

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