In my video “Diversity Index as Business KPI – The Concept of Diversity” I explain the mathematical concept of diversity introducing the Simpson Index λ and its complement (1-λ) as a measure of product diversification in markets.
Beside the Simpson Index there are many other indices used to describe diversity. I have developed a simple Diversity Excel template to calculate a couple of diversity indices for up to 20 categories. The following diversity indices are calculated:
- Berger-Parker Index
Hill numbers (“true diversity”) and Renyi entropy of order one to four
For a quick calculation of diversity indices you might also use my online calculator
For calculation of Shannon entropy and its partitioning into independent alpha and beta components see here.
Any feedback is welcome!
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