Balassa Index Calculator

Formula

The formula to calculate the Balassa Index (BI) is:

\[ \text{BI} = \left(\frac{\text{Eij}}{\text{Ej}}\right) / \left(\frac{\text{Wi}}{\text{W}}\right) \]

Where:

BI – The Balassa Index.
Eij – The export of a specific product from a specific country.
Ej – The total export of the specific country.
Wi – The world export of the specific product.
W – The total world export.

Definition

Balassa Index (BI): An economic indicator that calculates a country's export performance in a specific good or service relative to the world's export performance in the same good or service.
Export of Specific Product from Specific Country (Eij): The amount of a specific product exported by a specific country.
Total Export of Specific Country (Ej): The total amount of exports by a specific country.
World Export of Specific Product (Wi): The amount of a specific product exported worldwide.
Total World Export (W): The total amount of exports worldwide.

Example

Let's say the export of a specific product from a specific country (Eij) is 1000 units, the total export of the specific country (Ej) is 50000 units, the world export of the specific product (Wi) is 200000 units, and the total world export (W) is 10000000 units. Using the formula:

\[ \text{BI} = \left(\frac{1000}{50000}\right) / \left(\frac{200000}{10000000}\right) = 1 \]

So, the Balassa Index is 1, indicating no comparative advantage or disadvantage.