Lafay index

Definition

Economics

  • An index of specialization or revealed comparative advantage that takes account of both exports and imports and is therefore more suitable for a country with intraindustry trade. Due to Lafay (1992). This index for country i good j is LIij = 100[(Xij-Mij)/(Xij+Mij)-Sk(Xik-Mik)/Sk(Xik+Mik)](Xij+Mij)/Sk(Xik+Mik) where X and M are exports and imports.
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