The Location Quotient

The Location Quotient (LQ) is a measure used to compare the concentration of a particular industry or activity in a specific area to a larger reference area, like the national level. It helps identify how specialized a region is in a certain sector. An LQ greater than 1 indicates a higher concentration in that area compared to the reference, suggesting a potential competitive advantage or economic focus. An LQ less than 1 implies a lower concentration. Essentially, it helps understand regional economic strengths or weaknesses by highlighting where industries are thriving or lacking.