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.

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 ?**

**Find product-specific exports**: Identify the exports of a particular product by the country (Eij).**Get the total country exports**: Look at the total exports for the country (Ej).**Find global exports of the product**: Identify the global exports for that same product (Wi).**Get the total world exports**: Determine the overall global exports (W).**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.