Shift-share Analysis - Formula

Formula

We have a study area in which employment and population are growing (or declining; the technique works the same way in either case and it saves words to make the growth assumption.) Total employment in our area is e, and that in the ith activity is ei . We have a larger frame reference area, usually the nation, where total employment is E, and that in the ith activity is Ei . The shift-share model says that growth in the study area’s ith activity employment is a function of:

  • The study area’s share of national (or regional) growth.
  • The mix change in activities.
  • And the shift change of activities toward the study area.

This says that change in employment in the study area’s ith activity from time t to time t+n can be measured:

e_i^{t + n} - e_i^t = share\;change + mix\;change + shift\;change

or

e_i^{t + n} - e_i^t = e_i^t \left + e_i^t \left + e_i^t \left

As this brief discussion suggests, shift-share analysis may be viewed as adding explicit considerations to economic base analysis. Economic base analysis asks how an area shares in national growth. Shift-share goes on to look at the changing mix of activities and at whether activities are shifting toward or away from the study area.

Read more about this topic:  Shift-share Analysis

Famous quotes containing the word formula:

    “Given for one instant an intelligence which could comprehend all the forces by which nature is animated and the respective positions of the beings which compose it, if moreover this intelligence were vast enough to submit these data to analysis, it would embrace in the same formula both the movements of the largest bodies in the universe and those of the lightest atom; to it nothing would be uncertain, and the future as the past would be present to its eyes.”
    —Pierre Simon De Laplace (1749–1827)

    “Hidden away amongst Aschenbach’s writing was a passage directly asserting that nearly all the great things that exist owe their existence to a defiant despite: it is despite grief and anguish, despite poverty, loneliness, bodily weakness, vice and passion and a thousand inhibitions, that they have come into being at all. But this was more than an observation, it was an experience, it was positively the formula of his life and his fame, the key to his work.”
    —Thomas Mann (18751955)

    ““It’s hard enough to adjust [to the lack of control] in the beginning,” says a corporate vice president and single mother. “But then you realize that everything keeps changing, so you never regain control. I was just learning to take care of the belly-button stump, when it fell off. I had just learned to make formula really efficiently, when Sarah stopped using it.””
    —Anne C. Weisberg (20th century)