The index is constructed using patterns of industrial diversification as they existed in the manufacturing sector in 1987. The reference categories for the measure are the 1987 Standard Industrial Classification (SIC) system four-digit definitions (codes 2000-3999 only). Every possible pair of four-digit industry combinations is represented, excluding only same-digit pairs, pairs with catch-all industries labelled ‘not elsewhere classified’ (n.e.c.), and pairs in which no firm operated in one of the industries. (Please note that this is different than saying no diversified firm operated in both industries in a pair-a case for which scores are included).
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