Definition
The diversification index (1-HHi) is defined as the opposite of the Herfindahl-Hirschman Index (HHi).
The definition of the index is the following: XXXX where i represents the different income sources (on-farm, agricultural wages, non-agricultural wages, self-employment, public transfers, private transfers, rents), n the number of income sources, and P the percentage of every income source.
Because the HHi squares the shares (i.e. the shares of income sources), it strengthens the main pattern of the household. It ranges from zero (entirely specialized) to one (highly diversified).