U.S. Bureau of Labor Statistics U.S. Bureau of Labor StatisticsThe Location Quotient Calculator is a tool on the BLS website that creates, on demand, tables of private sector employment data, by industry, as measured by the Quarterly Census of Employment and Wages (QCEW) program. The calculator allows the ready comparison of relative employment levels in the United States, states, counties, and Metropolitan Statistical Areas (MSAs).
Location Quotients (LQs) are ratios that allow an area's distribution of employment by industry to be compared to a reference or base area's distribution. The reference area is usually the U.S., but it can also be a state or a metropolitan area. The reference or base industry is usually the All industry total. The discussion below assumes the defaults are used. LQs also allow areas to be easily compared to each other.
If an LQ is equal to 1, then the industry has the same share of its area employment as it does in the reference area. An LQ greater than 1 indicates an industry with a greater share of the local area employment than is the case in the reference area. For example (assuming the U.S. as the reference area), Las Vegas will have an LQ greater than 1 in the Leisure and Hospitality industry because this industry makes up a larger share of the Las Vegas employment total than it does for the country as a whole.
LQs are calculated by first, dividing local industry employment by the all industry total of local employment. Second, reference area industry employment is divided by the all industry total for the reference area. Finally, the local ratio is divided by the reference area ratio.
The location quotient calculator makes available three standard industry groups that can be used to study the entire spectrum of industries as classified by NAICS. As the location quotient calculator is currently limited to presenting private sector data, the industry groups do not include the Public Administration sector. The highest level (most aggregated) group is the SuperSector group. The second highest is the Sector group, and the most detailed is the Sub-Sector group.
The 2002 version of the North American Industry Classification System (NAICS) is the industry coding system used by the location quotient calculator.
Ratio of industry employment to base-industry employment times 100.
As an alternative to selecting one or more of the standard industry groups, users may designate one or a number of specific industries from the full range of private-sector industries defined under NAICS.
The reference year for the data.
The reference period for the data to be analyzed. This is currently limited to annual averages. The reduced detail currently available on the database for other time periods would significantly limit the location quotients that could be calculated.
This is currently limited to employment.
This is currently limited to private ownership.
This is currently limited to the aggregate category of all establishment sizes.
The location quotient tool calculates location quotients with respect to a base or reference area and from one to three analysis areas.
The default base or reference area is the United States Total. This can be readily overridden for special purposes such as intrastate analysis. Users are cautioned that if they select an area other than the U.S. Total as the base area, they may develop location quotients that have little or no economic meaning.
Up to three analysis areas may be specified. For most location quotient purposes, the analysis area(s) should be a subset or component of the base area.
The users must designate the group or groups of industries, or the specific industries they wish to have processed by the location quotient tool. The industries are defined under the 2002 version of the North American Industry Classification System.
The default base or reference industry is the All industry total. This can be readily overridden for special purposes such as sector breakdown analysis. Users are cautioned that if they select an industry other than the all industry total, they may develop location quotients that have little or no economic meaning.
At least one industry or industry group must be selected to use the location quotient tool.
Private sector QCEW data is available for areas classified by Metropolitan Statistical Area (MSA). The QCEW data used by the location quotient calculator is classified according MSA definitions released by the Office of Management and Budget as of March 2004.
BLS has defined a total of twelve SuperSectors, one of which is Public Administration. The eleven SuperSectors used for classifying private-sector activity are:
The 20 NAICS Sectors used for classifying private sector activity are:
The 93 NAICS sub-sectors used for classifying private sector activity are:
Last Modified Date: March 22, 2005
