The Location Quotient Approach
In this approach the local economy is compared to the larger regional or national economy of which the locality is a part
Location quotient is defined as the ratio of an industry’s share of the local economy to the industry’s share of the national economy
eti = Local employment in industry i in year t
etT = Total local employment in year t
E ti = National /regional employment in industry i at time t
E tT = Total national / regional employment in time t