Location Quotients

A location quotient (LQ) is an analytical statistic that measures a region’s industrial specialisation relative to a larger geographic unit (usually the nation). An LQ is computed as an industry’s share of a regional total for some economic statistic (earnings, GDP by metropolitan area, employment, etc.) divided by the industry’s share of the national total for the same statistic. For example, an LQ of 1.0 in agriculture means that the region and the nation are equally specialised in agriculture; while an LQ of 2 means that the region has a higher concentration in agriculture than the nation.