MIT11_481Js09_lec06 - MIT OpenCourseWare http/

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MIT OpenCourseWare 11.481J / 1.284J / ESD.192J Analyzing and Accounting for Regional Economic Growth Spring 2009 For information about citing these materials or our Terms of Use, visit: .
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LOCATION QUOTIENTS AND ECONOMIC-BASE MULTIPLIER METHODS OF DETERMINING BASIC AND NONBASIC SECTORS 1. Assumption method : analyst determines from intuitive knowledge of sectors in local economy 2. Survey method : an analyst surveys firms in local economy to determine amount each firm exports from one region. 3. Location quotient method E E / E E = LQ n o n i g o g i If LQ > 1.0 region exports If LQ = 0.0 region neither exports nor imports SOME OF MANY PROBLEMS WITH LOCATION QUOTIENTS a. Some local industries (hotels) and federal and state government output depend largely on nonlocal therefore basic sector. b. Local government is basic regardless of LQ. c. Look carefully at real estate and construction activities that may be tied to a booming national economy or heavy immigration. 4.
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MIT11_481Js09_lec06 - MIT OpenCourseWare http/

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