Measuring performance heterogeneity within groups: A two-dimensional approach

We introduce a new two-dimensional measure for the heterogeneity of performance within groups of economic units. This measure accounts both, for the relative performance of the single units of groups and their relative size. We demonstrate that the new measure leads to a much more differentiated description of heterogeneity than alternative measures, for example, the mean or range. In particular, we provide an example to demonstrate that the proposed measure of heterogeneity is relatively robust with regard to extreme values of units ("outliers") with a relatively small size.