The measurement of comparative advantage practically started when Balassa (1965),
in an attempt to study the long term effects of trade liberalization, formally introduced the
concept of a “revealed” comparative advantage (RCA). He discussed various theoretical
explanations of international trade and approaches to measuring RCA, factors influencing the
patterns of comparative advantages, and proposed the so-called “export performance index”
(Balssa‟s index or RCA index). He argued that a country‟s trade performance can reveal the
comparative advantages because it reflects relative costs as well as differences in non-price
factors