Measuring and Testing Spatial Mass Concentration with Micro-geographic Data

We address the question of measuring and testing industrial spatial concentration based on micro-geographic data with distance-based methods. We discuss the basic requirements for such measures and we propose four additional requirements. We also discuss the null assumptions classically used for testing aggregation of a particular sector and propose an alternative point of view. Our general index measure involves a cumulative and a non-cumulative version. This allows us to propose an alternative version of the Duranton-Overman index with a proper baseline as well as a cumulative version of this same index. We present simulations to evaluate the respective powers of this new approach and the classical ones.