How to properly gear compensate for short crank arms? Is there a linear relationship between gearing and crank arm length?  For example, on my multispeed bike, my favorite gearing is 34/20 which is 1.7 and with 26" tires, that is 44.2 gear inches but I have 170mm crank arms.  For my wife to be, I want a similar "feel" (pedal effort) but her bike has 24" diameter tires and 140mm crank arms.  So does that mean instead of shooting for 44.2 gear inches, I should also compensate for the shorter crank arms and instead go for (140/170) * 44.2 gear inches = 36.4 gear inches?  If so, since they are 24" tires, I will need about a 1.5 gearing so something like 34/22 or 32/22 sprocket combination should be just about right. 

Additional information (although not sure if relevant here) is I am 5' 9" tall and she is 4' 11" tall.  With her shorter, weaker legs, I am thinking a little extra compensation is in order.  The "shortest" gearing I can go with (using sprockets I already have), are 28/22 which is 1.27 which will be 30.5 gear inches.
Being able to easily compare gearing across bikes with different crank lengths is the main reason why Sheldon Brown advocated switching to the proposed Gain Ratios system for expressing bicycle gearing. Gain Ratios measure gearing in terms of movement of the pedal rather than rotation of the chainring. You can use his popular Gearing Calculator to check it out. The other systems are more or less racer-myopic and force you to do additional math when different length cranks are involved, but yes you've got it as far as how to do so.