US micropolitan area economies in the 1990's

Abstract

Scope and Method of the Study: This paper uses a hedonic growth model developed by Glaeser and Tobio (2008) and general dominance analysis to examine the forces contributing to the growth of micropolitan areas during the 1990's. The paper also analyses unexplained outliers of micropolitan growth. Micropolitan areas have been described by the US Census Bureau as emerging metropolitan areas and are therefore important for growth of regions.

Findings and Conclusions: The results show that micropolitan growth benefitted from relatively attractive amenities compare to the rest of the nation during the 1990's. Micropolitan areas characterized by stability (high percentage of marriage households), high concentration of people in the "50-64" year old age group, high relative concentration of people with higher education degrees, mild January temperatures and access to water and highways were preferred.

However, local housing markets and the state of the local regulatory environment were also very important determinants of migration and economic growth. Relatively inflexible local housing markets and difficult local regulatory environment significantly retarded overall migration and economic growth, even in micropolitan areas with relatively high level of natural amenities. Most of the outliers' performance could be explained by the state of the local regulatory environment.