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## Coefficients of Localization (or Dispersion) and Specialization (or Diversification)

##### (http://faculty.washington.edu/krumme/systems/localiz.html)
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### Concentration Terminology

D I S T R I B U T I O N
RELATIVELY EVEN RELATIVELY UNEVEN
(= Concentration)
SPATIAL
DISTRIBUTION
"Dispersion" "Localization"
"Concentration"
INDUSTRIAL
DISTRIBUTION
"Diversification" "Specialization"

.
Concentration Coefficient = 1/2
 N S i=1 |Xi-Yi|

100

### Localization of an Industry

REGIONS PERCENT OF NATIONAL TOTAL EMPLOYMENT OF FOCAL INDUSTRY IN REGION (A-D) PERCENT OF TOTAL U.S. MANUFACTURING EMPLOYMENT IN REGION (A-D) DIFFERENCE IN RELATIVE REGIONAL EMPLOYMENT IN FOCAL INDUSTRY & ALL MANUFACTURING ACTIVITIES LOCATION QUOTIENT OF FOCAL INDUSTRY IN RESPECTIVE REGIONS
A 15 35 -20 .43
B 35 30 +5 1.17
C 30 20 +10 1.5
D 20 15 +5 1.33
Sum 100% 100% -20
+20
(1.0)

The focal industry has a coefficient of localization of .2. The higher the coefficient, the greater the localization (spatial concentration) of the industry. We could also calculate a coefficient of dispersion by deducting .2 from 1.0 = .8

### Specialization of a Region

INDUSTRIES PERCENT OF TOTAL (REGIONAL) EMPLOYMENT IN FOCAL REGION IN INDUSTRIES (A-D) PERCENT OF TOTAL U.S. MANUFACTURING EMPLOYMENT IN INDUSTRIES (A-D) DIFFERENCE BETWEEN REGIONAL & NATIONAL EMPLOYMENT IN 4 INDUSTRIES LOCATION QUOTIENTS OF THE INDUSTRIES IN FOCAL REGION
A 15 35 -20 .43
B 35 30 +5 1.17
C 30 20 +10 1.5
D 20 15 +5 1.33
Sum 100% 100% -20
+20
(1.0)

Internet Sites:

Literature:

• Diversification of the Utah Economy [1994]

• Hayter, Roger. Dynamics of Industrial Location, Wiley, 1997, pp.435-7.

• Hoover, Edgar M. and Frank Giarratani, An Introduction to Regional Economics [Full online text of 3rd, 1985 edition of the classic!] Ch.9 Section 4.2 on "Regional Specialization

• Isard, Walter et al., Methods of Interregional and Regional Analysis, Ashgate, 1998, Ch.2, pp.7ff.. [HT391.M48 1998 OUGL Stacks]

• Isard, Walter. Methods of Regional Analysis. MIT, 1960, pp.249ff.

• Knox, Paul. Diversification : strategies for military-dependent communities, businesses and workers in Washington state [Olympia? Wash. : Dept. of Community Development?, 1991?] [Suzzallo/Allen Stacks HC79.D4 D59 1991]

• Krugman, P. 1991b. Geography and Trade. MIT Press: Cambridge, Mass. Ch.2: "Localization"
pp.55ff. use of Gini coefficient
Appendix D (pp.129ff.) Locational Gini Coefficients

• Regional Participation in Higher Education and the Distribution of Higher Education Resources across Regions [Occasional Paper Series; Higher Education Division Department of Education, Training and Youth Affairs May 1999 / Commonwealth of Australia 1999]

• Siegel, Paul B., Thomas G. Johnson, and Jeffrey Alwang, REGIONAL ECONOMIC DIVERSITY AND DIVERSIFICATION: SEEKING A FRAMEWORK FOR ANALYSIS Growth and Change 26(2) 1995: 261-284.