Question

Explain the assumptions method, the location quotient method, and the minimum requirement method to determine local industries sectors? ( At least one paper) ( Modern Urban and Regional Economics Textbook) ( Need urgent )

Answer 1

1) The Assumption Method-

This is the easiest, most widely famous and most inexpensive method to divide economic activity into basic and non-basic areas. Diversified economic activity, usually represented by broadly defined industries.
Classification is defined as basic or non-basic, based on subjective judgment of the analyst. This method is fast and inexpensive and is subjected to criticism as it relies heavily on analysis.

2) The location quotient method-

One of the first pure statistical methods to be established is the use
Location quotient method. The meyhod was originally developed by Florence states that,,
The measure of concentration level of any particular industry in any area is given by comparing the proportion of occupants engaged in that industry in a particular area with the corresponding proportion of the entire country as a whole. Although actual development and subsequent implementation of the concept are usually based on employment data, but others can be used measuring an economic activity such as income or wages when assessing location quotient.

3) The minimum requirement method-

This compares the local employment structure with the pattern of similar regions across the country. Technology acknowledges that the relationship between basic and non-basic economic activity may vary between regions of different sizes. While the use of location quotations requires only industrial data for the region under consideration and country under consideration, the minimum requirement method requires more data as it requires data for many comparable regions.