Please note that the content of this book primarily consists of articles available from Wikipedia or other free sources online. The Theil index, derived by econometrician Henri Theil, is a statistic used to measure economic inequality. The Theil index is derived from Shannon''s measure of information entropy. Letting T be the Theil index and S be Shannon''s information entropy measure, Shannon derived his entropy measure in terms of the probability of an event occurring. This can be interpreted in the Theil index as the probability a dollar drawn at random from the population came from a specific individual. This is the same as the first term, the individual''s share of aggregate income.
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