Template-type: ReDif-Paper 1.0
Author-Name: Straathof, Bas
Author-workplace-name: MERIT
Title: A note on Shannon’s entropy as an index of product variety
Abstract: This note shows that the antilog of Shannon’s entropy is a suitableindex of product variety for three reasons. First, for symmetricproduct types it is equal to the number of product types. Second, disaggregationof the underlying product set always leads to an increasein measured product variety. Third, the introduction or disappearanceof a marginal type does not cause a discrete change in the variety index.These properties hold for a class of weights that includes, but isnot limited to, frequencies.
Keywords: mathematical economics and econometrics ; 
Series: Research Memoranda
Creation-Date: 2003
Number: 031
File-URL: https://unu-merit.nl/publications/rmpdf/2003/rm2003-031.pdf
File-Format: application/pdf
File-Size: 228128
Handle: RePEc:unm:umamer:2003031