  The insulating state of matter is characterized by the excitation spectrum,
but also by qualitative features of the electronic ground state. The insulating
ground wavefunction in fact: (i) sustains macroscopic polarization, and (ii) is
localized. We give a sharp definition of the latter concept, and we show how
the two basic features stem from essentially the same formalism. Our approach
to localization is exemplified by means of a two--band Hubbard model in one
dimension. In the noninteracting limit the wavefunction localization is
measured by the spread of the Wannier orbitals.
