Indices of industrial diversity and regional economic composition

Attempts to differentiate regions from one another, whether in social, demographic, or economic terms, have led to the development of numerous indices to summarize the economic composition of regions. This study revisits classic indices of industrial diversity to evaluate their applicability for benchmarking local and regional economies. Specifically, we explore a multivariate extension of these diversity indices for measuring concentration in an effort to evaluate their ability to accurately depict spatial relationships of county level resources for the contiguous U.S. The relative abilities of the classic indices are compared to a developed measure of resource concentration, the County Similarity Index (CS-Index), which represents a computationally simple and flexible alternative to these indices. Results suggest the CS-Index produces superior results to the indices evaluated, particularly with regard to the spatial relationships of county resource concentrations, which are quantified using global and local indicators of spatial association.