What is a location quotient?

Location Quotient Definition

A location quotient (LQ) is a measure used in economic geography and regional planning to analyze the concentration of a particular industry, occupation, or demographic feature within a region compared to a larger reference area, typically the national level. It helps identify specializations or concentrations of industries within a region.

An LQ greater than 1 indicates a higher concentration of a particular industry or characteristic in the region than the national average, suggesting specialization. An LQ less than 1 implies a lower concentration, indicating the region is less specialized in that area. This tool is valuable for economic development, investment decisions, and workforce planning.

Example: If a city has a location quotient of 2.0 in the technology sector, it means the concentration of tech industry employment in the city is twice the national average, highlighting the city as a tech hub.