LOCATION QUOTIENT
The Location Quotient (LQ) is a statistical tool used to measure the relative concentration of
a particular characteristic (such as employment, population, or literacy) in a region compared
to a larger reference area (such as the nation).
LQ > 1: The region has a higher concentration than the reference average
LQ = 1: The region has the same concentration as the reference average
LQ < 1: The region has a lower concentration than the reference average
Here, the reference average refers to the national average.
FORMULA FOR LQ:
LQ = (Xi/Ti)/(X/T)
Where,
Xi = value of a variable (rural/urban population) in a region
Ti = total value of that variable in the region
X = value of the same variable in the reference area (nation)
T = total value of that value in the reference area (nation)
STEPS TO CALCULATE LQ
1. Collect data for both Rural and Urban populations (2011) across all States/UTs and
for India as a whole.
Rural population of a state vs total population of that state.
Rural population of India vs total population of India.
2. Compute the share of the variable in the region (state):
Regional share = Xi/Ti
3. Compute the share of the variable in the nation:
National share = X/T
4. Divide regional share by national share to get the LQ:
LQ = Regional share/National share
The formula applied to calculate LQ in Excel is: LQ = (Xi/Ti)/(X/T)
Location Quotient has been calculated for both Rural and Urban populations.
For example, for Andhra Pradesh
Rural LQ 2011 = 1.022658 (slightly higher rural share compared to national
average)
Urban LQ 2011 = 0.949905 (slightly lower urban share compared to national
average)
Andhra Pradesh in 2011 had a little more rural population and a little less
urban population compared to the overall pattern of India.
