Indicator Series Methodology: This analysis uses industry-level employment data for the United States and Southern Nevada. The data are analyzed at the 1-digit NAICS (North America Standard Industrial Classification) level of detail, applying the Hachman Index. The Hachman Index is measured, for a given month, as the inverse of the weighted sum of the location quotients, by industry, for a given county, across all industries. A location quotient (“LQ”) for a given month is the fraction of the County’s employment in a given industry divided by the fraction of the nation’s employment in the same industry for the same month. The LQs are weighted by the share of Clark County’s employment in a given industry, for the given time period.

Employment in a few key industries, which differ considerably from the fraction of employment for those industries nationwide, return relatively large weighted LQs and, consequently, a relatively low Hachman Index value (since it is the inverse of the weighted LQs). Conversely, more closely reflecting the national employment distribution will have relatively small weighted LQs, and a relatively high Hachman Index value. Thus, a perfectly diversified economy would return an index value of 100.

Definitions: Employment – Total amount of employment for the Las Vegas Metropolitan Statistical Area (MSA) (source: Nevada Department of Employment, Training and Rehabilitation). Location Quotient - A calculated ratio between the local economy and the economy of some reference unit. This ratio is calculated for all industries to determine whether or not the local economy has a greater share of that industry than expected (source: Forecasting for Plan Development Glossary of Terms, Florida State University, Department of Urban and Regional Planning).