QCEW Location Quotient Details

QCEW Location quotients (LQs) are available from the Open Data Access files and from the CSV files on the QCEW Data Files page. Location quotients compare the concentration of an industry within a specific area to the concentration of that industry nationwide. Location quotients are calculated for each of the data points within the CSV files and the Data Viewer. The example below focuses on employment. However, the calculation process is the same for the other data points. QCEW location quotients are also available from the QCEW Data Viewer, the State and County Map application, and the high level county files.

Location quotients are ratios that allow an area's distribution of employment by industry, ownership, and size class to be compared to a reference area's distribution. The U.S. is used as the reference area for all LQs within the files. The reference industry is always the all-industry, all-ownerships total for the local area, and for the nation.

If an LQ is equal to 1, then the industry has the same share of its area employment as it does in the nation. An LQ greater than 1 indicates an industry with a greater share of the local area employment than is the case nationwide. For example, 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 nation as a whole.

LQs are calculated by first, dividing local industry employment by the all-industry, all-ownerships total of local employment. Second, national industry employment is divided by the all industry, all ownerships total for the nation. Finally, the local ratio is divided by the national ratio.


    Local Concentration = (Leisure and Hospitality, Private, Las Vegas) / (All-Industry Total, All-Ownerships, Las Vegas)

    National Concentration = (Leisure and Hospitality, Private, U.S.) / (All-Industry Total, All-Ownerships, U.S.)

    Location Quotient = Local Concentration / National Concentration

See the following examples:

    1) LQ for June 2015 employment for Natural Resources and Mining in Los Angeles County, Private Ownership:

	(L.A. County, Private, Natural Resources & Mining, June 2015 Emp. = 9,093)
 	---------------------------------------------------------------------------
	(L.A. County, All-Ownerships, All-Industry Total, June 2015 Emp. = 4,240,495)
LQ = --------------------------------------------------------------------------------- = 0.14
	(U.S. total, Private, Natural Resources & Mining, June 2015 Emp. = 2,124,651)
	------------------------------------------------------------------------------
	(U.S. total, All-Ownerships, All-Industry Total, June 2015 Emp. = 140,616,268)

    The concentration of June 2015 employment in Los Angeles County for Private, Natural Resources and Mining, is 0.14 times
    that of the concentration of employment for Private, Natural Resources and Mining, in the U.S. This industry makes up a much smaller share     of the Los Angeles County employment total than it does for the nation as a whole.


    2) LQ for June 2015 employment for Financial Activities in New York County, Private Ownership:

	(N.Y. County, Private, Financial Activities, June 2015 Emp. = 370,233)
 	---------------------------------------------------------------------------
	(N.Y. County, All-Ownerships, All-Industry Total, June 2015 Emp. = 2,377,400)
LQ = --------------------------------------------------------------------------------- = 2.78
	(U.S. total, Private, Financial Activities, June 2015 Emp. = 7,868,252)
	------------------------------------------------------------------------------
	(U.S. total, All-Ownerships, All-Industry Total, June 2015 Emp. = 140,616,268)

    The concentration of June 2015 employment in New York County for Private, Financial Activities, is 2.78 times
    that of the concentration of employment for Private, Financial Activities, in the U.S. This industry makes up a larger share of the New York     County employment total than it does for the nation as a whole.

Related Documentation:   QCEW Data Guide;   Documentation Guide;   QCEW Data Files;   Open Data Access Guide;  

 

Last Modified Date: December 15, 2016