Understanding Location Quotients (LQ)
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Understandi ng Location Quotients (LQ) Dr. Kevin Stolarick
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Understanding Location Quotients (LQ). Dr. Kevin Stolarick. Gridland. 100 400. 200 5,000. 400 3,000. 700 6,000. 2,000 10,000. 2,000 7,500. 200 2,000. 500 8,000. 1,250 4,000. Total Population: 45,900 Total Number of X: 7,350. - PowerPoint PPT Presentation
Transcript of Understanding Location Quotients (LQ)
Understanding Location Quotients (LQ)
Dr. Kevin Stolarick
Gridland
100
400
200
5,000
400
3,000
700
6,000
2,000
10,000
2,000
7,500
200
2,000
500
8,000
1,250
4,000
Total Population:45,900
Total Number of X:
7,350
Want to compare how distribution of X compares to distribution of population.
Gridland
100
400
200
5,000
400
3,000
700
6,000
2,000
10,000
2,000
7,500
200
2,000
500
8,000
1,250
4,000
Average across all of Gridland =
16.01% = 7,350 / 45,900
How does each location compare to the average?
Gridland
25%
= 100
/ 400
4%
= 200
/ 5,000
13.3%
= 400
/ 3,000
11.7%
= 700
/ 6,000
20%
= 2,000
/ 10,000
26.7%
= 2,000
/ 7,500
10%
= 200
/ 2,000
6.25%
= 500
/ 8,000
31.25%
= 1,250
/ 4,000
Average across all of Gridland =
16.01% = 7,350 / 45,900
How does each location compare to the average?
•Concentration within a region•Compared to•Average Concentration across all regions
•LQ =(X in region / total for region)÷ (total X all regions / total all regions)
Location Quotient (1)
Gridland – Location Quotients
1.56= 25%
÷ 16.01%
0.25= 4%
÷ 16.01%
0.83= 13.3%
÷ 16.01%
0.73= 11.7%
÷ 16.01%
1.25= 20%
÷ 16.01%
1.67= 26.7%
÷ 16.01%
0.62= 10%
÷ 16.01%
0.39= 6.25%
÷ 16.01%
1.95= 31.25%
÷ 16.01%
Average across all of Gridland =
16.01% = 7,350 / 45,900
How does each location compare to the average?
Gridland – Location Quotients
1.56 0.25 0.83
0.73 1.25 1.67
0.62 0.39 1.95
LQ shows high & low concentrations within individual regions – compared to entire geography
100
400
200
5,000
400
3,000
700
6,000
2,000
10,000
2,000
7,500
200
2,000
500
8,000
1,250
4,000
• Share of “item of interest” in a region• Compared to• Share of total population in the same region
• LQ =(X in region / total X all regions)÷ (total for region / total all regions)
• Exactly the same – depends on data available
Location Quotient (2)
•Porter – Clusters– Industry-level (SIC or NAICS)–Total employment, sales–Predefined “clusters”
–Suppliers, buyers, related industries
•Milken – Tech-Pole– “High tech” industries
• (Stolarick) Occupational Clusters
Using Location Quotients
• Includes software, electronics, biomedical products, and engineering services (appendix)•Combination of two measures–Region’s High Tech LQ
–Small, concentrated regions–Region’s total share of High Tech Output
–Larger, producing regions
Milken “Tech-Pole” Index
•Total “High Tech” employment•Base is US & Canada•Each region compared to base•As with Milken, NA Tech Pole =
High Tech LQ xShare of NA High Tech Employment
North American “Tech-Pole”
High-Tech Metros by LQ
High-Tech Metros by Output Share
Tech-Poles
