Home :: UNESCAP :: Site map :: Contact















In partnership with





Support provided
by IDRC, Canada
 
    APTIAD  Interactive  Trade  Indicators

APTIAD Home     Trade agreements database     Glossary  

 Back to ITI indices

RCA
Comparative advantage underlies economists’ explanations for the observed pattern of inter-industry trade. In theoretical models, comparative advantage is expressed in terms of relative prices evaluated in the absence of trade. Since these are not observed, in practice we measure comparative advantage indirectly. Revealed comparative advantage indices (RCA) use the trade pattern to identify the sectors in which an economy has a comparative advantage, by comparing the country of interests’ trade profile with the world average. In other words, it is the ratio of the exports of the commodity from the source to total exports from the source, over the same ratio for the world.

Select source region:
Select commodity:
Select year:
 
  
Definition:
The RCA index is defined as the ratio of two shares. The numerator is the share of a country’s total exports of the commodity of interest in its total exports. The denominator is share of world exports of the same commodity in total world exports.

Range of values:
Takes a value between 0 and +∞. A country is said to have a revealed comparative advantage if the value exceeds unity.

For further note on this indicator, including an example and formula, see the relevant section of Trade Statistics in Policymaking: A Handbook of Commonly Used Trade Indices and Indicators.

Support provided by IDRC, Canada