Question

Which method can be identifying the basic sector and non-basic sector in economics base model?

Answer 1

The economy is a combination of basic and non basic industries. Basic sector is made up of local businesses (firms) that are entirely dependent upon external factors. .Non basic firms are those that depend largely upon local business conditions.

Economic base analysis is a theory that posits that activities in an area divide into two categories: basic and nonbasic. Basic industries are those exporting from the region and bringing wealth from outside, while nonbasic (or service) industries support basic industries. Because export-import flows are usually not tracked at sub-national (regional) levels, it is not practical to study industry output and trade flows to and from a region. As an alternative, the concepts of basic and nonbasic are operationalized using employment data. The theory was developed by Robert Murray Haig in his work on the Regional Plan of New York in 1928.

The basic industries of a region are identified by comparing employment in the region to national norms. Once basic employment is identified, the outlook for basic employment is investigated sector by sector and projections made sector by sector