Balassa Index Calculator

To calculate the Balassa Index, divide the share of a country’s exports of a product by its total exports and then divide that by the share of world exports of that product relative to total global exports.

Balassa Index Calculator

Enter any 3 values to calculate the missing variable

Export of a specific product from a specific country (Eij) Total export of the specific country (Ej) World export of the specific product (Wi) Total world export (W) Balassa Index (BI)

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The Balassa Index (BI), also known as the Revealed Comparative Advantage (RCA) index, is a measure used in economics to identify the relative advantage or disadvantage of a certain country in a specific industry or sector. This index helps to determine how competitive a country is in exporting a specific product compared to other nations.

A value greater than 1 indicates a comparative advantage, while a value less than 1 suggests a comparative disadvantage. The formula for calculating the Balassa Index is simple and easy to follow.

Formula:

$$\text{BI} = \frac{Eij / Ej}{Wi / W$$

Where:

• Eij = Exports of a product by a country.
• Ej = Total exports of that country.
• Wi = World exports of that product.
• W = Total world exports.

How to Calculate ?

1. Find product-specific exports: Identify the exports of a particular product by the country (Eij).
2. Get the total country exports: Look at the total exports for the country (Ej).
3. Find global exports of the product: Identify the global exports for that same product (Wi).
4. Get the total world exports: Determine the overall global exports (W).
5. Apply the formula: Plug the values into the formula to calculate the Balassa Index (BI).

Solved Calculations

Example 1:

Variable	Value
Eij	10,000
Ej	100,000
Wi	500,000
W	5,000,000

$$\text{BI} = \frac{10,000 / 100,000}{500,000 / 5,000,000} = \frac{0.1}{0.1} = 1$$

Answer: The Balassa Index (BI) is 1, indicating neutral comparative advantage.

Example 2:

Variable	Value
Eij	50,000
Ej	500,000
Wi	1,000,000
W	10,000,000

$$\text{BI} = \frac{50,000 / 500,000}{1,000,000 / 10,000,000} = \frac{0.1}{0.1} = 1$$

Answer: The Balassa Index (BI) is 1, indicating neutral comparative advantage.

Final Words:

This calculator simplifies the process of calculating the Balassa Index, empowering countries to make informed decisions and foster economic growth.