300 QUARTERLY JOURNAL OF ECONOMICS potentially close-substitute output groups which are actually poor substitutes because of geographical market segmentation. The Census industry then includes several theoretical industries, and its concentration measure will tend to represent that in each of the local industries only in the event that each of the principal firms is diversi- fied among all areas so as to control roughly the same proportion of each local market. If the various firms specialize in given areas, must be assumed in the absence of information on the point, the Census industry concentration figure will tend to understate ths true concentrations for the component theoretical industries. Thue we have rejected out of hand Census industries(and related concen- tration measures) for which the data have revealed significant geo- graphical market segmentation but no evidence of balanced inter-area diversification by firms. Our sample has thus been drawn only from industries where all principal sellers tend to reach all major market areas alike Geographical difficulties aside, however, which Census industrie have appropriate scope in terms of the potential substitutability of ncluded and excluded outputs? This is a difficult decision to make Lacking the crucial data on cross-elasticities of demand, we may either make a large number of horseback judgments, or accept either the Census“ industry” or the Census‘ product” definition as an approximation to what we seek. To avoid reliance on personal judgment in selecting a sample, we have assumed in general that geographical factors aside a theoretical industry is found in the case of each Census industry either in this "industry"'or in the individual Census products which it includes. Thus with the firearms industry which includes the Census products pistols, rifles, and shotguns, we assume that either there is a firearms industry in the theoretical sense there are pistol, rifle, and shotgun industries in the theoretical sense. Geographical difficulties aside, the theoretical industry we seek is assumed to be no broader than the Census industry- which is thus presumed to exclude no close substitutes-and no narrow than the Census product. We have avoided making a decision as to whether the true industry is the Census"industry"or the Census product. Each Census industry is thus generally viewed as com prising either a theoretical industry or a com aplex of several theoretical industries This last judgment has been modified only in a very few cases where there was conclusive evidence that close-substitute outputs were excluded from the Census industry-for classification establishing three sugar industries was not honored. In