DP11528 A simple characterization of the family of diversity indices
|Author(s):||Davydov Denis, Shlomo Weber|
|Publication Date:||September 2016|
|Keyword(s):||axioms, consistency, Diversity index, entropy, fractionalization|
|JEL(s):||F51, F63, Z13|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=11528|
Over the last twenty years economists have become increasingly interested whether the diversity enhances or impedes economic and social development of a society that consist of multiple distinct population groups. On the one hand, Sassen (2006) and Florida (2002) claim that ethnic and cultural diversity was a crucial factor in urban development. However, there is another line of research, originated by Mauro (1995) and Easterly and Levine (1997) (see also Ginsburgh and Weber, 2011), showing that an excessive degree of the societal fractionalization may have negative, and sometimes, catastrophic, consequences for economic and societal growth.