in either a designated market or in a region or for the whole world. The RCA is measured using post-trade data.
The index of revealed comparative advantage (RCAij) has a relatively simple interpretation. If it takes a value greater than unity, the country has a revealed comparative advantage in that product.
The advantage of using the comparative advantage is that it considers the intrinsic advantage of a particular export commodity and is consistent with changes in an economy’s relative factor endowment and productivity. The disadvantage, however, is that it cannot distinguish improvements in factor endowments and pursuit of appropriate trade policies by a country.