Pairing the Location Quotient and Assumption Techniques

It is also important to note that the Location Quotient Technique is often paired with the Assumption Technique to provide a more complete set of results. Some industries can clearly and correctly be identified as Basic and other can be identified as Non-Basic.

For example, SIC Code 70 (Hotels and Lodging) is generally assumed to be Basic sector employment, regardless of its calculated LQ, because this industry, by definition, largely serves a non-local demand. Similarly, Local Government employment is always assumed to be Non-basic because these jobs, again by definition,serve local demand. By pairing the assumptions of these different techniques a more reasonable and accurate assessment of the local economy is possible.