Balassa Index

Usage

balassa_index(
  trade_data,
  discrete = TRUE,
  cutoff = 1,
  country = "country",
  product = "product",
  value = "value"
)

Arguments

trade_data

(Type: data.frame or matrix) a dataset such as world_gdp_avg_1998_to_2000 containing countries, products and exported values.

discrete

(Type: logical) whether converting the Balassa Index to discrete (0/1) values. Anything below the specified cutoff is converted to 0 and 1 otherwise. By default this is set to TRUE.

cutoff

(Type: numeric) the cutoff to use for discretization. By default this is set to 1.

country

(Type: character) the column with the countries. By default this is set to "country". Used only if the input is a data.frame.

product

(Type: character) the column with the products. By default this is set to "product". Used only if the input is a data.frame.

value

(Type: character) the column with the metric for country-product pairs. By default this is set to "value". Used only if the input is a data.frame.

Value

A matrix with the Balassa Index.

Details

The current implementation follows (Mariani et al. 2015) to obtain a metric for specialisation. In the context of international trade, if the Balassa Index for a country-product pair is more than 1, it means that country is specialized in that product. If the input for this function is a data.frame instead of a matrix, the function shall aggregate the data and convert the input to a matrix.

References

For more information see:

Mariani M, Vidmer A, Medo M, Zhang Y (2015). “Measuring economic complexity of countries and products: which metric to use?” The European Physical Journal B, 88(11), 293. doi:10.1140/epjb/e2015-60298-7 .

and the references therein.

Examples

bi <- balassa_index(world_trade_avg_1998_to_2000)

# partial view of index
n <- seq_len(5)
bi[n, n]
#>     0011 0012 0013 0014 0015
#> afg    0    0    0    0    0
#> ago    0    0    0    0    0
#> aia    0    0    0    0    0
#> alb    0    0    0    0    0
#> and    1    0    0    0    1