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Shift & Share Analysis

(http://faculty.washington.edu/krumme/350/shiftshare.html)

Supporting and Related Pages:


Internet Sites:

Literature:

Acs, Zoltan J. and N. Adrien (1998) High Technology Employment in major US metropolitan Areas

Andrikopoulos, A., J. Brox and E. Carvalho (1990) Shift-Share Analysis and the Potential for Predicting Regional Growth Patterns: Some Evidence for the Region of Quebec, Cananda.

Barf, R.A., and Prentice L. Knight III.(1988) Dynamic Shift-Share Analysis Growth and Change 19(2):1-9

Richard A. Barff and Prentice L. Knight III "Problems Associated with Comparative Static Approach" (Stutz)

Beck, Roger J. and William D. Herr (1990) Employment Linkages from a Modified Shift Share Analysis: An Illinois Example Studies 20(3):38ff.

Casler, S.D (1989) A Theoretical Context for Shift and Share Analysis Regional studies 23 (1);

Dinc. Mustafa and K.E.Haynes (1999) Regional Efficiency in the Manufacturing Sector: Integrated Shift Share and Date Development Analysis Development Quarterly, 13(2):183-199

Gazel, C. R. and R.K. Schwer (1998) Growth of International Exports Among the States: Can a modified Shift Share Analysis Explain it? International Regional Science Review 21(2): 185-204

Robert Q. Hanham, Geography, West Virginia University, Morgantown Shawn Banasick, doctoral student, West Virginia University, Shift-Share Analysis and Changes in Japanese Manufacturing Employment, GROWTH AND CHANGE: A Journal of Urban and Regional Policy, WINTER 2000, Vol. 31, No. 1

Hayter, Roger. The Dynamics of Industrial Location. Wiley, 1997/8. pp.435-9.

Holden, D.R., G.M.A.Nairn, J.K. Swales (1989) Growth and Policy: A Critique

Hoppes, R. Bradley (1997) The journal of regional analysis & policy, 27(1);35-

Hoppes, R.B. (1990) Shift Share Analysis on Spread Sheets Planning Association 56: (1) 96-97

Hoover, Edgar M., An Introduction to Regional Economics, 2nd ed., N.Y.: Knopf 1975, p.263, 267 & pp.295-8. 3rd edition, 1985 (full text online!)

James, Franklin Jr and James Hughes, "A Test of Shift and Share Analysis as a Predictive Device," Journ. of Regional Science 13(2), 1973, 223ff.

Klosterman, R.E. (1990) Community Analysis and Planning Techniques, Chapter-12 (Shift Share Analysis), Savage Maryland: Rowman & Littlefield Publishers Inc.,

Knudsen, D.C. and R. Barf (1991) Shift share analysis as a linear model Environment & planning A, 23(3);421

Krumme, G. "Identifying Regional Economic Change: A Variation of the Theme 'Shift and Share'," The Canadian Geographer, 13(1), 1969, pp.76-80.

Lasuen, J.R., Venezuela: An Industrial Shift-Share Analysis 1941-1961, Regional and Urban Economics 1(2), 1971, 153-220.

Loveridge, Scott and A.C. Selting (1999) Testing Dynamic Shift Shares Science Perspectives 24(1):23-41

Loveridge, Scott and A.C. Selting (1998) A Review and Comparison of Shift Share Identities

McDonough, Carol C and Balbir S. Sihag, "The Incorporation of Multiple Bases Into Shift-Share Analysis," Growth and Change Winter 1991, pp.1-9.

Markusen, A.R. etal., (1991) International Trade, Productivity, and US Regional Job Growth: A Shift Share Interpretation Science Review 14(1):15-39

Nissan, Edward and G. Carter (1994) Predicting and Evaluating Changes in Employment Growth Science Perspectives, 24(2):49-63

Perloff, Harvey S., Edgar S. Dunn, Jr., Eric E. Lampard, and Richard F. Muth. Regions, Resources and Economic Growth. Resources for the Future, Inc., Washington D.C. Lincoln: University of Nebraska Press 1960.

Ray, M.A. and J.T.Harvey, "Employment Changes in the European Economic Community: A Shift-Share Analysis," Review of Regional Studies, 25(1), Summer 1995, pp.97-110.

Seyfried, William, Examining The Economic Competitiveness Of The Economies Of The Southern United States (1996) [www.westga.edu/~bquest/1996/seyfried.html]


Shift and Share Analysis for Holukuluku County 1985 - 1995

using an unduly simplified & hypothetical 4-industry employment classification

Text Version of this Table
Explanation of columns and Interpretation

TABLE 1: Nature & Relative Importance
of Holukuluku Industries

Industry County % State % L.Q. State Change County Change
(1) (4) (7)
I* 50 10 5.0 +10% +100%
II 10 20 0.5 +20% 0%
III 20 40 0.5 +30% +25%
IV 20 30 0.67 +40% +40%
Total 100 100 (1.0) +29% +63%


TABLE 2: Calculations

Ind- ustry
Empl. in State
1985 | 1995
State Chg. Empl. in County
1985 | 1995
Cty. Chg. Exp. Empl Total Shift Exp. Empl. Diff. Effect Comp. Effect
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
I* 20,000 22,000 +10% 500 1,000 +100% 645 355 550 450 -95
II 40,000 48,000 +20% 100 100 0% 129 -29 120 -20 -9
III 80,000 104,000 +30% 200 250 +25% 258 -8 260 -10 +2
IV 60,000 84,000 +40% 200 280 +40% 258 22 280 -- +22
Total 200,000 258,000 +29% 1,000 1,630 +63% 1,290 340 1,210 420 -80

*
Graph involving industry I (as an example for industry's contribution to region's totals)


EXPLANATIONS: Components of Regional Growth or Decline

Shifts and Effects: (Totals)


G = R + S
Regional Growth = Regional Share + Shift
_________|_________
|------------------------|
Differential
(Sd)
........... Proportional
(Sp)
G = R + Sd ........ + ........ Sp
630 = 290 + 420........ - ........80



Category Krumme's Numbers Hoover's Numbers
Total regional employment at t(-) 1,000 1331
Total regional employment at t+1 1,6301320
-------- --------
Regional Employment Change (Growth)= 630 -11
National Growth Component
or: "Regional share of national growth"
(-) 290 77
--------
TOTAL SHIFT = 340. -88
1. Differential effect
also called:
  • local-factor effect
  • competitive effect
  • regional effect
  • . + 420 -93
    2. Proportional(ity) effect
    also called:
  • industry mix effect
  • composition effect
  • structural effect
  • . - 80 +5



    Columns: (by Industry)

    1. Industry or Sector
    2. Absolute employment in Benchmark Region (State), 1985
    3. Absolute employment in Benchmark Region (State), 1995
    4. Change in employment in Benchmark Region (State) 1985-1995, in %
    5. County Holukuluku: Absolute employment, 1985
    6. County Holukuluku: Absolute employment, 1995
    7. County Holukuluku's increase in employment from 1985 to 1995, in % (& absolute net increase)
    8. Holukuluku: EXPECTED employment, 1995 (Expected on the basis of total state employment growth = 29%)
    1. State Growth Effect (col.8 - col.5)
    1. Total Employment Shift by industries, 1985-1995 (col.6 - col.8)
    2. Holukuluku: EXPECTED employment, 1995 (Expected on the basis of state employment growth of individual industries; see col.4)
    3. Differential Effect (or "local-factor effect) (=Shift based on different growth rates of individual industries in Holukuluku as compared with the state; col.6 - col.10)

    4. Composition Effect (or "industry-mix" or "structural" or "proportionality effect") (=Shift based on differences in the industrial composition between county and state at the beginning of the period (col.3) and the effect of the deviation of individual state industrial growth rates (col.4) from their total aggregate (and weighted) growth rate (29%). There are two ways to arrive at the values of col.12. First, they represent the residuals of col.9 and col.11; they also can be calculated on the basis of col.4 and col.5; the average state growth rate (29%) is subtracted from the individual industrial rate of change in col.4 and the difference divided by 100 and multiplied by the absolute county employment (base year 1985) for the respective industry (col.5). Thus, the proportionality effect (better: the contribution of a particular county industry to this effect) would be relatively large both
      1. as a result of a large difference between the industry's state growth and the aggregate state growth rate (across all industries, i.e. the extent to which a county industry is a [state] "growth industry"), and
      2. as a result of a large county employment in that industry (i.e. how much of the (state) growth industry the region actually has). The proportionality effect can become negative only if the aggregate state growth rate is larger than the industry's state growth rate (i.e. if the industry is not a [state] "growth industry").

    Interpretation:

    Industry I is, at the state level, a slow-growth industry (below average). Holukuluku has a supposedly "unfavorably" large percentage of employment in this industry, i.e. it has an unfavorable industrial composition (from a benchmark point of view). However, the very high growth rate (unexpected from a state-level point of view) of industry I more than compensates for the overall unfavorable industrial structure of Holukuluku's economy and also for the relatively low growth rates of industries II and III.


    Table generated by Microsoft Excel and saved as HTML file
    Netscape Version of this Table

    TEXT Version of Table:
                Shift and Share Analysis for Holukuluku 1985 - 1995
     
       Ind-  Reg. Nat.      Nat. Empl/Regio Reg.  Exp. Total Exp.  Diff. Comp.
       ustry  %     %  L.Q. Chg. 1985 1995  Chg. Empl. Shift Empl. Eff.  Eff.
    
    (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
    I* 50 10 5.0 +10% 500 1,000 +100% 645 355 550 450 -95 II 10 20 0.5 +20% 100 100 0% 129 -29 120 -20 -9 III 20 40 0.5 +30% 200 250 +25% 258 -8 260 -10 +2 IV 20 30 0.67 +40% 200 280 +40% 258 22 280 -- +22
    Total 100 100 (1.0) +29% 1,000 1,630 +63% 1,290 340 1,210 420 -80

    * Graph involving industry I (as an example for industry's contribution to region's totals)

    Explanation of columns and Interpretation
    A Shift and Share Exercise


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