Assessing economic activity in coastal areas: A shift‐share approach

Abstract

An essential aspect of economic analysis associated with planning efforts is identifying the composition of existing economic activity and understanding historical trends in economic change. The shift‐share model is a useful and inexpensive tool for this purpose. Shift‐share analysis evaluates changes in local economic activities relative to changes in a reference area (usually the state or nation). Economic change is separated into a reference area component, an industry mix component, and a local share component. These measure, respectively, the effect on the local economy due to changes in the reference area, factors specific to the local mix of industries, and the changing competitive position of the local area relative to the reference area.

A shift‐share analysis of Florida's coastal counties reveals that all grew much faster over the 1965–1975 period than did the national economy. This rapid growth is primarily a result of a net shift of economic activity toward the study area relative to the nation. However, a few coastal counties did exhibit a mix of slow‐growing industries. Specific industry results for Florida counties at the eighty‐industry level reveal that many industries showed significant shifts toward Florida's coastal counties. The performance of individual industries in the coastal counties generally exceeded that of the same industries in noncoastal counties.