30.01.2013 Views

Trade and Employment From Myths to Facts - International Labour ...

Trade and Employment From Myths to Facts - International Labour ...

Trade and Employment From Myths to Facts - International Labour ...

SHOW MORE
SHOW LESS

You also want an ePaper? Increase the reach of your titles

YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.

TECHNICAL APPENDIX 7.A<br />

7.A.1 Overall indices<br />

7.A.1.1 Herfindhal, Gini <strong>and</strong> Theil<br />

For a given country <strong>and</strong> year (but omitting country <strong>and</strong> time subscripts), the<br />

Herfindahl index of export concentration, normalized <strong>to</strong> a range between zero <strong>and</strong><br />

one, is given by the following formula:<br />

n<br />

∑<br />

Chapter 7: <strong>Trade</strong> diversification: Drivers <strong>and</strong> impacts<br />

where is the share of export line k (with amount<br />

exported χ sk = xk / xk k =1<br />

κ) in <strong>to</strong>tal exports <strong>and</strong> n is the number of export lines.<br />

As for the Gini index, several equivalent definitions have been used in the literature,<br />

among which one of the simplest can be calculated by first ordering export<br />

items (at the appropriate level of aggregation) by increasing size (or share) <strong>and</strong> calculating<br />

cumulative export shares.<br />

. The Gini coefficient is then<br />

Finally, Theil’s entropy index (Theil, 1972) is given by<br />

.<br />

7.A.1.2 Theil decomposition<br />

Let n be the notional number of export products (the 5,016 lines of the HS6<br />

nomenclature), n j the number of export lines in group j, μ the average dollar export<br />

value, μ j group j’s average dollar export value, <strong>and</strong> χ κ the dollar value of export<br />

line k. The between-groups component is<br />

.<br />

(2)<br />

301

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!