Lokaliseringquotienter

Lokaliseringquotienter, commonly known as location quotients (LQs), are analytical tools used in regional economics and geography to assess how concentrated a specific attribute—such as employment in a given industry—is in a sub-area relative to a larger reference region. They help identify local specialization or dependence by comparing local shares to regional shares.

The standard formula for an industry i in area A relative to a reference region B is:

LQ_i,A = (e_{i,A} / E_A) / (e_{i,B} / E_B),

where e_{i,A} is the number employed in industry i in area A, E_A is total employment in area A, e_{i,B} is employment in industry i in region B, and E_B is total employment in region B. A location quotient greater than 1 indicates a higher concentration of industry i in area A than in the region B; less than 1 indicates a lower concentration. Values around 1 suggest similar shares.

Applications and interpretation:

LQs are used to identify regional specialization, plan economic development, allocate resources, and analyze market potential. They can be computed for multiple industries to create a profile of an area’s economic structure.

Limitations:

LQs depend on chosen boundaries and the reference region, and can be sensitive to data quality and scale. They show concentration but not causality, and extreme values can arise in small areas or with volatile data. Variants include shift-share analyses and weighted quotients to address some of these issues.