Theil Index

The Theil index is a statistic used to measure economic inequality. It has also been used to measure the lack of racial diversity. The basic Theil index T_T is the same as redundancy in information theory which is the maximum possible entropy of the data minus the observed entropy. It is a special case of the generalized entropy index. It can be viewed as a measure of redundancy, lack of diversity, isolation, segregation, inequality, non-randomness, and compressibility. It was proposed by econometrician Henri Theil, a successor of Jan Tinbergen at the Erasmus University Rotterdam.