Location Quotients

Location quotients are a simple, widely used technique, primarily in economic geography, to measure how specialized the structure of the economy of a given study region is in comparison with a reference region (typically the country). They compare regional structural composition with that of the reference region by assessing an industry's share of a total regional economy relative to its share nationally. Usually, location quotients use employment data, although they can be used with any other kind of relevant information, such as output. Thus, in its simplest terms, a location quotient (LQ) can be defined as

In mathematical terms,

where

eir = employment in industry i in region r,

etr = total employment in region r,

eib = employment in industry i in reference region b, and

etb = total ...