EconGeo (version 2.0)

prody: Compute the prody index of industries from regions - industries matrices

Description

This function computes the prody index of industries from (incidence) regions - industries matrices, as proposed by Hausmann, Hwang & Rodrik (2007). The index gives an associated income level for each industry. It represents a weighted average of per-capita GDPs (but GDP can be replaced by R&D, education...), where the weights correspond to the revealed comparative advantage of each region in a given industry (or sector, technology, ...).

Usage

prody(mat, vec)

Value

A numeric vector representing the prody index of industries. Each value in the vector corresponds to the associated income level for an industry.

Arguments

mat

An incidence matrix with regions in rows and industries in columns

vec

A vector that gives GDP, R&D, education or any other relevant regional attribute that will be used to compute the weighted average for each industry

Author

Pierre-Alexandre Balland

References

Balassa, B. (1965) Trade Liberalization and Revealed Comparative Advantage, The Manchester School 33: 99-123

Hausmann, R., Hwang, J. & Rodrik, D. (2007) What you export matters, Journal of economic growth 12: 1-25.

See Also

location_quotient

Examples

## generate a region - industry matrix
set.seed(31)
mat <- matrix(sample(0:100, 20, replace = TRUE), ncol = 4)
rownames(mat) <- c("R1", "R2", "R3", "R4", "R5")
colnames(mat) <- c("I1", "I2", "I3", "I4")

## a vector of GDP of regions
vec <- c(5, 10, 15, 25, 50)
## run the function
prody(mat, vec)