An Entropy Measure of the Geographic Concentration of Economic Activity

Abstract

and has suggested that there may be two aims associated with the use of entropy. The more ambitious aim is to search for a methodology for mathematized geography, and the more modest aim is to assess specific solutions based on entropy measurement as compared with conventional probability approaches. Our goal here is of the more modest level in that we shall demonstrate that entropy is a useful index of the geographic concentration of economic activity. In particular, we shall use entropy and its counterpart, the numbers-equivalent, to test the hypothesis that in the 194-county Tennessee Valley Region there was a significant decline in the geographic concentration of manufacturing activity during the period 1959 to 1968. We shall examine the hypothesis that geographic concentration is less for those industries we have defined as labor-intensive than for other types of industries. Further, we shall contend that differences in concentrations in different types of industries are explained, at least in part, by different sets of location factors. Our approach involves the use of asymptotic distribution theory to provide a statistical means for determining whether a particular index of concentration differs