A tool from BLS

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A tool from BLS

• The Location
• Quotient

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Outline

• Defining Location Quotient
• How can it be used
• Where is the tool
• How to use the tool
• Comparison Purposes
• Explore differences
• Local versus Larger Scale

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Location Quotient

• Developed to compare imports and exports of a
  sub-area to a larger area
• By focusing on the relative strength of a
  commodity one can determine the impact this
  commodity has on the local economy

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The math

• The Commodity for the area (Ca) is divided by
  Total of the local area (Ta)
• That ratio is then divided by the Commodity for
  the area at large (Ct) is divided by Total of the
  area at large (Tt)

Ca/Ta Ct/Tt
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Interpretation

• When a Location Quotient is greater than 1.0 it
  indicates the area is stronger than the larger
  area. In terms of commodities the local area is
  an exporter

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Start with the BLS website
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Go to the State and County Employment - QCEW
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Identify the Areas
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Specify the Industries
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The Data
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Percents
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The Location Quotients
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Now What

• The Location Quotient can be used to identify
  outliers
• Examples
• CES
• UI Claims
• OES staffing patterns
• Projections
• LED data
• Use is limited only by your imagination

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Limitations

• Need to compare the same time period
• Need the same category
• Does not answer why
• Does not imply causality
• Focuses the discussion, but rarely answers the
  question

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Any Questions or Thoughts?
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Its time