REGIONAL ECONOMIC DIVERSITY AND DIVERSIFICATION

Regional scientists have long attempted to develop meaningful definitions and measures of economic diversity and diversification, and to establish functional relationships between diversity, diversification, and economic performance. The multiplicity of definitions and measures explains, in part, the confusion about these relationships. A framework that sorts out the overlaps, contradictions, and gaps of the various definitions and measures is needed. Such a framework would explicitly address the question, ''What is the relationship between a region's changing economic structure and performance?'' In this paper it is suggested that an input-output model that incorporates elements of portfolio theory be used as the integrating framework for analysis.