To assess states’ relative performance in strategically important industries, ITIF’s State Hamilton Index uses an analytical statistic known as a location quotient (LQ), which measures any region’s level of industrial specialization relative to a larger geographic unit—in this case, a state relative to the United States as a whole. States with LQs above 1.00 are over-performing the national average, while those with LQs below 1.00 are underperforming.
