The critical role standardization of rates plays in the MFP (Multi Factor Partitioning) model

The paper demonstrates the critical role standardization of rates plays in the Multi Factor Partitioning model. A helpful tool in the study of changing employment patterns, MFP recognizes that regional and industry growth rates are composite structures. Part of a region’s growth rate is due to regional conditions and part of it to its industrial structure. Similarly, part of an industry’s growth rate is due to the dynamics of the industry itself and part to the size of the regions. MFP uses the standardization of the rates to extract the region effect and industry effect components from their composite structures. The extraction process requires that the standardized national growth rate serves as the "expected" rate, a rate that all regions and industries are expected to achieve if employment growth is proportional to the sizes of the regions and industries. The extracted MFP components describe the growth patterns of the regions or urban centres within a national system. They are useful in identifying the type of strategies required in planning regional development: regional strategies in some instances, industrial strategies in others. The paper applies MFP to the analysis of growth rate patterns within the Canadian Metropolitan Areas from 2006 to 2022.