Fractionalization and Inter-Group Differences

17 Pages Posted: 26 Jan 2007

See all articles by Jo Thori Lind

Jo Thori Lind

University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Abstract

Fractionalization has been shown to have a detrimental effect on growth, public goods provision, and redistribution. The conventional measure of fractionalization is the Herfindahl index, which calculates the probability that two persons drawn at random belong to different groups. This measure implicitly assumes that all groups are equally distant. In this paper, I argue that a more appropriate measure of fractionalization should take into account that some groups are more different than others, so we need a measure of groups distance. We should then measure fractionalization as the average distance between every citizen, or equivalently the average distance between groups weighted by group size. I present a simple method to estimate these distances from opinion survey data by regressing stated opinions on indicator variables from group and a set of control variables. The coefficients on the group variables can then be interpreted as measures of distance. Finally, I apply the method to US data and show that we get more reasonable measures of fractionalization.

Suggested Citation

Lind, Jo Thori, Fractionalization and Inter-Group Differences. Kyklos, Vol. 60, No. 1, pp. 123-139, February 2007, Available at SSRN: https://ssrn.com/abstract=959507 or http://dx.doi.org/10.1111/j.1467-6435.2007.00363.x

Jo Thori Lind (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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