On the Location Quotient Confidence Interval

The location quotient is a useful tool for comparing area characteristics. It has applications in areas such as health care and economics. Individual location quotient standard deviations play an important role in comparing area characteristics. Using the Delta Method, a closed‐form expression is derived for calculating the standard deviation of the individual location quotient. The performance of the proposed method is assessed by simulation. The application of individual location quotient confidence intervals based on the estimated standard deviations is illustrated using health utilization data.