Using location quotients to estimate the economic base and trade flows

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Abstract
Norcliffe G. B. (1983) Using location quotients to estimate the economic base and trade flows, Reg. Studies 17, 161–168. Two modifications are introduced in an attempt to improve estimates of the economic base and trade flows based on location quotients. National consumption measures for each industry are used to control for imports into, and exports out of, the system as a whole. Regional consumption measures are used to capture the effects of a broad range of exogeneous employment that are omitted by measures based on manufacturing employment. The results indicate a modest improvement in the accuracy of predictions, and show that crosshauling is manifestly the main problem that must be overcome if estimates are to be improved further.