Locational Quotient

Locational Quotient

Order Description

Okanogan county in Washington state is the county the coursework is for. All the data needed can be gathered from census.gov
Locational quotient is calculated from the American Community Survey Data, as described in class. Start with your current Count workforce by Industry Table. Add data for Washington from the same source and insert in the column to the right lined up with the employment categories. Calculate % in another column.

The next column will be the calculation for Locational Quotient (LQ). The formula to insert is:

LQ = (employment in your county data for a category/total county employment)/

(employment in the same category for WA State/total WA State employment)

Set up the formula to calculate, remembering to use the $ sign for the total county and total state employment so you can scroll down.

Run the formula, and you will have a ratio number that is the LQ

To assess use this measure

Local Extremely Strong 1.66 or more

Strong Local Economy 1.33 – 1.66

Slightly Strong local 1.00-1.33

Local equal to State 1.00

Slightly Weak local 0.66-1.00

Weak local 0.33-0.66

Extremely Weak Local .33 or less

Create a report (narrative and table showing LQs) that describe the local economy identifying strengths, weaknesses, and possible strategies for economic development.

We decided in class that the Local Employment Dynamics (LED) files (from census.gov, look under Business in the top menu, and it is the last item in that list. Click open map (you do not need to download anything) to get data).

Locational Quotient requires that you create two data sets for the same year, one with your county data by NAICS code (download files from Data Report in LED. We will calculate LQ for 2010 data), and also download state data by NAICS code.

The formula to calculate LQ is:

LQ = (economic activity employment (NAICS CODE CATEGORY) for your county /total employment for your county)/

(economic activity employment for state / total state employment)

Note: / is divided by.

Interpreting LQ Results for your narrative discussion.

An LQ of 1.0 means your county is the same as the state.

An LQ between 1.0 and 1.33 or is a strong local economic activity

An LQ of 1.67 or higher is very strong local economic activity

An LQ between 1.0 and .67 is a weak component of the local economy.

An LQ below .5 is a very weak component of the local economy