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A variety of factors impact the economic performance and resilience of U.S. rural areas, including a region’s level of human capital, industry structure, amenities and a rural area’s economic integration with large urban centers. Our poster presents results from a USDA-funded project that examines the economic integration of all U.S. rural counties with large U.S. metropolitan areas such as New York, Chicago, Los Angeles, Dallas, Atlanta, Washington DC, and others. Economic integration is measured with a method of econometric connectedness, which uses monthly employment data from over 30 years to examine how economic shocks in big cities affect economic activity in rural areas. The results show a wide range of economic integration across counties, with some rural areas having economies that exhibit virtually no integration with U.S. urban centers while other communities are highly integrated. The econometric connectedness method provides a novel way to measure the urban influence of U.S. counties for comparing the economic performance of regions across the urban-to-rural spectrum and examining the effects of “rurality” on an economic indicator of interest (e.g., employment growth, housing prices). Our results complement existing indicators such as the Urban Influence Codes of the U.S. Department of Agriculture (USDA), which place U.S. counties in one of twelve discrete categories based on their population size and proximity to an urban area. Unlike the USDA Urban Influence Codes, our measure of econometric connectedness has a continuous scale that ranges from zero to 100, which is calibrated using observed patterns of month-to-month employment fluctuations.

Publication Date

10-28-2024

Economic Integration of Rural Areas with Large Urban Centers

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