Consistency of the proposed additive measures of revealed comparative advantage

Abstract

The recently proposed additive measures of revealed comparative advantage (RCA) have been argued as better alternatives to the Balassa Index. This note builds on those suggestions and provides a framework to assess their applicability by means of their consistency across the dimensions and inferences that the indices' informational content allow. A formal empirical investigation supports the presented arguments that the proposed additive constructs of RCA possess certain inconsistencies that may obscure comparative analyses based on them, whereas alternative additive measures proposed here are shown to be more consistent over space and time, and hence may serve as better instruments in related quantitative research.Revealed comparative advantage