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Florida State University 
Department of Urban and Regional Planning
Planning Methods III: Forecasting 

The Data Set

Calculating
Industry Shares

Calculating
Basic Sector
Employment

King County's
Base Multiplier

Discussion
Questions

MINIMUM REQUIREMENTS EXAMPLE: KING COUNTY AND COMPARISON COUNTIES

The Data Set

Using the following statistics we will utilize the Minimum Requirements Approach to calculate the total Basic sector employment and the Base Multiplier for King County. The three comparison counties, Los Angeles (CA) County, San Diego (CA) County, and Multnomah (Portland, OR) County, have been chosen because they are all West Coast, major metropolitan counties with significant populations (over one million each).

It is important to note that to perform this analysis more correctly two adjustments would be necessary for our example:

1) very specific selection criteria should be identified and clearly listed in our report

2) a larger sample of comparison counties would be used; a sample of three is too small, but sufficient for our example

Note also that we are using a very coarse level of data (Major Industrial Sectors) to keep our example simple. So these results should be understood as representing a starting point for our analysis. To truly get an understanding of the King County economy an analysis of at least the Two-Digit level (if not Three-Digit) should be undertaken. This example is provided to understand the mechanics of the technique.

Table 1: Employment by Major Industrial Sectors for King County and Comparison Counties, 1994

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Table 1 displays the raw employment totals for King County and its comparison counties. Note that the Total Employment for our counties differs by some margin, from a low of 357,737 all the way to 3,391,482. However, because we have identified a basic set of comparison criteria (metropolitan, West Coast Counties) and because we will calculate ratios by sector, these differences are not too problematic. It should be noted that this significant variation in Total Employment would indeed be problematic without defensible and clearly delineated selection criteria.

Calculating Industry Shares for Our Comparison Areas

Now, using our formula from the Minimum Requirements page, we can calculate the employment shares by Major Industrial Sector for our four counties. We can then identify the "minimum shares region" for each region which then allows us to identify those sectors that King County is assumed to have some Basic sector employment. This is done in Table 2.

Table 2: Employment Shares by Major Industrial Sector for King County and Comparison Counties, 1994

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* Note that Nonclassifiable Establishments were not assessed as a normal industrial sector. This "catch-all" category is quite small, so it makes very little difference in the calculations of Basic Sector employment.

In Table 2 we see that King County is the minimum shares region in only the Services sector. Therefore, King County is assumed to have some Basic Sector employment in all other sectors. Using the formula to calculate Basic Sector employment from the Minimum Requirements page, we can next calculate the Basic sector employment for each industrial sector except the Service Sector.

Calculating King County Basic Employment by Industry

Table 3: Calculation of Basic Sector Employment by Industry for King County, Minimum Requirements Technique

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Table 3 illustrates the calculations for the Minimum Requirements method. For example, for the Manufacturing Major Industrial Sector the Basic Employment is calculated by:

(0.2138 - 0.1441) X 840,297 = 58,571 Manu Basic sector jobs

Using this formula we can calculate King County's Basic Sector jobs to total 158,118. This has been done in Table 3.

The Base Multiplier

Finally, our last task is to calculate the Base Multiplier for King County having utilized the Minimum Requirements Technique. Our formula is quite simple:

Base Multiplier = Total Employment / Basic Employment

Therefore King County's Base Multiplier, via this technique, would be calculated to be:

Base Multiplier = 840,297 / 158,118 = 5.3144

Discussion Questions

• Interpret this Base Multiplier. What does a BM of 5.3144 mean?

• Why does King County have zero Basic sector employment in the Services Major Industrial Classification?

• Would this number make an employee like Boeing happy? Why or why not?

• How does this number compare with with the BM calculated for the Assumption Technique?

• What do you think would happen if we included a larger number of counties in our sample? Would the BM go up or down?

• What do you think would happen if we used a "finer" set of data in our calculations (meaning Three-Digit level data)?

• Do you see any reason to combine the Minimum Requirements Technique and any of other techniques? Why? As the professional analyst, which techniques would you combine with the MR Technique?

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