economic growth in the united states of america a county-level analysis

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Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis April Harris Elana Kaufman Sohair Omar Elizabeth Pearson

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Page 1: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Economic GrowthIN THE UNITED STATES OF AMERICA

A County-level Analysis

April HarrisElana Kaufman

Sohair OmarElizabeth Pearson

Page 2: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Objective

•To explore the factors driving differences in regional economic growth across the United States.

•To replicate the analysis in the OECD paper, “The Sources of Economic Growth in OECD Regions: A Parametric Analysis,” (December 2008) for the U.S. case.

Page 3: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Agenda

1. Theory

2. Data

3. Summary Statistics

4. Results

5. Findings/Conclusion

6. Future research/Recommendations

7. Questions

Page 4: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

What theories explain economic growth?

1. Neo-Classical Theory

2. Endogenous Growth Theory

3. New Economic Geography

(NEG)

Page 5: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Neo-Classical Theory Assumes Diminishing Returns And Exogenous

Technology • Key assumptions:

• Capital is subject to diminishing returns• Perfect competition• An exogenously determined constant rate

reflects the progress made in technology

•3 Key factors:• Capital intensities• Human capital• Technology (not included in the model;

exogenous)

Page 6: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Neo-Classical Theory Predicts Convergence

• Long-run growth is the result of continuous technological progress, which is determined exogenously

• Key implication: Conditional convergence

• Problems• Limited empirical evidence of convergence• Leaves technological progress out of the model

Page 7: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Endogenous Growth Theory Assumes Diminishing Returns and Endogenous

Technology• Key assumptions:

• Capital is subject to diminishing returns• In many endogenous growth models the assumption of

perfect competition is relaxed, and some degree of monopoly power is thought to exist.

•3 Key factors:• Physical capital• Human capital• Technology (included in the model: endogenous)

Page 8: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Endogenous Growth Theory: Internal factors are the main sources of

economic growth•Investing in human capital the development of new forms of technology & efficient and effective means of production economic growth

•Investment in human capital (education and training of the workforce) is an essential ingredient of growth

•The main implication: policies which embrace openness, competition, change and innovation will promote growth.

•Theory emphasizes that private investment in R&D is the central source of technical progress

•No convergence is predicted.

Page 9: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

• Economic geography: the location of factors of production in space

• Key Implication• Despite early similarity regions can become quite different!

• Key factors causing agglomeration or dispersion1. Economies of scale 2. Transportation costs3. Location of demand4. Population

New Economic Geography: Why is manufacturing concentrated in a few

regions?

Page 10: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

New Economic Geography predicts that the right mix of key

factors causes growth• How does differentiation occur?

• General NEG model answersOne region slightly larger

+transportation costs

+ IRS+

larger initial production=

more people & production spatially close together

This will allow the larger initial region to grow while the smaller initial region does not - or does so to a lesser degree and at a slower rate.

Page 11: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

How does NEG differ from Neo-Classical and Endogenous Growth

Theories?• NEG takes scale into account

• NEG models propose that external increasing returns to scale incentivize agglomeration

• Agglomeration captures, via scale effects, how small initial differences cause large growth differentials over time

Page 12: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

We obtained data on 3,079 counties between 1998-2007

Variable Source Year(s)

Annualized per capita personal income growth

Bureau of Economic Analysis

1998-2007

Log of income in the initial year

Bureau of Economic Analysis

1998

Physical capital/infrastructure

ESRI Data and Maps 9.3 Media Kit

2008

Education rates U.S. Census 2000

Innovation Index Economic Development Administration

2008

Employment rate Bureau of Economic Analysis

1998-2007

Employment specialization Census of Employment and Wages

1998-2007

Accessibility to Markets/Distance to Markets

ESRI Data and Maps 9.3 Media Kit Bureau of Economic Analysis

2008

1998

Page 13: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Per Capita Personal Income•Ranges from $8,579 in Loup County, NE to $132,728 in Teton

County, WY• Used to create three variables:

• Dependent variable: annualized per capita personal income growth1/10 * ln(income in 2007) – ln(income in 1998)

• Highest: 7% in Sublette, WY • Lowest: -3% in Crowley, CO• Mean: 1%

• Independent variable: log of income in the initial year, 1998• Highest: $76,450 in New York, NY• Lowest: $7,756 in Loup, NE

• Independent variable: per capita personal income in nearby counties, weighted by distance and other spatial measures

Page 14: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Legend

Per Capita Personal Income 1998

income_1998

$7,756.00 - $17,986.00

$17,986.01 - $21,883.00

$21,883.01 - $26,732.00

$26,732.01 - $35,888.00

$35,888.01 - $76,450.00

Per Capita Personal Income By County 1998

Page 15: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Legend

Per Capita Personal Income 2007

income_2007

$6,777.41 - $20,522.62

$20,522.63 - $25,391.39

$25,391.40 - $32,690.20

$32,690.21 - $47,484.53

$47,484.54 - $104,855.10

Per Capita Personal Income By County 2007

Page 16: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Legend

Total PCPI Growth

1998-2007

-0.035588 - 0.002768

0.002769 - 0.011047

0.011048 - 0.019209

0.019210 - 0.031769

0.031770 - 0.070344

Total Per Capita Personal Income Growth Rate By County 1998-2007

Page 17: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Infrastructure•A measure of Physical Capital.

• Mileage of major roads by county

• Airports by county

Page 18: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Major Road Mileage by County

01

002

003

004

00F

req

uenc

y

0 1000 2000 3000 4000 5000Major roads in miles

high_lengt~s 3079 380.8334 280.9239 32.13309 4584.723 Variable Obs Mean Std. Dev. Min Max

. sum high_length_miles

Page 19: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Number of airports by County

Total 3,079 100.00 6 1 0.03 100.00 4 7 0.23 99.97 3 8 0.26 99.74 2 62 2.01 99.48 1 458 14.87 97.47 0 2,543 82.59 82.59 airports Freq. Percent Cum. Number of

05

001

000

150

02

000

250

0N

umb

er o

f Cou

ntie

s

0 1 2 3 4 5 6Number of airports

Page 20: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Education Rates• Source: 2000 Census • Percent of population with less than high school degree

• Highest: 62.5% in Starr, TX• Lowest: 4.4% in Douglas, CO• Median: 21.6%

• Percent of population with a high school diploma• Highest: 53.5% in Carroll, OH• Lowest: 12.4% in Arlington, VA• Median: 34.7%

• Percent of population with more than a high school degree• Highest: 82.1% in Los Alamos, NM• Lowest: 17.2% in McDowell, WV• Median: 41.4%

• These three variables add up to 1

(Capture above info in bar graph)

Page 21: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Innovation Index

[COMING SOON]

Page 22: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment Rate• Source: 2000 Census (for cross-section)• Youth employment rate: population aged 16 – 20 that is working divided by total population 16 – 20

• Highest: 100% in Loving, TX• Lowest: 8.78% in Shannon, SD• Median: 46.2%

• Working age employment rate: population aged 21 – 65 that is working divided by total population 21 – 65

• Highest: 88.4% in Stanley, SD• Lowest: 35.9% in McDowell, WV• Median: 73%

• Total employment rate• Highest: 86.7% in Stanley, SD• Lowest: 33.6% in McDowell, WV• Median: 69.9%

(NEED BAR GRAPH!)

Page 23: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment Specialization• What is it?

– Measure of industrial concentration of a region (county)

• What is it meant to capture?– Captures notion of agglomeration

– What is agglomeration?The close spatial concentration of industryA determinant of economic growth in NEG growth

theory – How is it modeled?

Specialization indices• Herfindahl Index• Krugman Index

Page 24: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment SpecializationHerfindahl Index (HI)

• Definition:– NΣi=1 s2

• Features:– Ranges from 0 to 1.0

– 0 = industrial diversity (lots of firms)

– 1 = lack of industrial diversity (one or few firms)

• Is an absolute measure; Does not take neighbors into account

Page 25: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment Specialization

Page 26: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment SpecializationKrugman Index (KI)

• Definition:– KI = ∑j|aij-b-ij|

• a = the share of industry j in county i’s total employment • b = the share of the same industry in the employment of all

other counties, -i• KI = the absolute values of the difference between these

shares, summed over all industries • Features:

– Ranges from 0 to 2.0 – 0 = county i has industrial composition identical to its comparison

counties – 2 = county i has industrial composition without any similarity (no

common industries) to its comparison counties • Is a relative measure; Compares to one’s neighbors. It’s our choice!

Page 27: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment Specialization

Page 28: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment Specialization

Page 29: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment Specialization

Page 30: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Employment Specialization

Page 31: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Accessibility to Markets/Distance to Markets

[PENDING]

Page 32: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0447189 .008105 5.52 0.000 .0288272 .0606106lninitiali~e -.003361 .0008151 -4.12 0.000 -.0049592 -.0017628 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00976 Adj R-squared = 0.0052 Residual .293232788 3077 .000095298 R-squared = 0.0055 Model .001620368 1 .001620368 Prob > F = 0.0000 F( 1, 3077) = 17.00 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth lninitialincome

Page 33: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0107438 .0002969 36.18 0.000 .0101616 .0113261high_lengt~s 1.48e-06 6.28e-07 2.35 0.019 2.46e-07 2.71e-06 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00978 Adj R-squared = 0.0015 Residual .294323761 3077 .000095653 R-squared = 0.0018 Model .000529396 1 .000529396 Prob > F = 0.0187 F( 1, 3077) = 5.53 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth high_length_miles

Page 34: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0973624 .0104257 9.34 0.000 .0769203 .1178044percentmor~s .0401284 .0028069 14.30 0.000 .0346248 .0456319percenthsd~a (dropped)percentles~s .0231712 .0035923 6.45 0.000 .0161277 .0302147lninitiali~e -.0109003 .0010488 -10.39 0.000 -.0129567 -.0088438 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00942 Adj R-squared = 0.0737 Residual .272867456 3075 .000088737 R-squared = 0.0746 Model .0219857 3 .007328567 Prob > F = 0.0000 F( 3, 3075) = 82.59 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth lninitialincome percentlessthanhs percenthsdiploma percentmorethanhs

Page 35: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0109692 .00019 57.74 0.000 .0105968 .0113417 airports .0016204 .0003464 4.68 0.000 .0009412 .0022995 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00975 Adj R-squared = 0.0067 Residual .292771168 3077 .000095148 R-squared = 0.0071 Model .002081988 1 .002081988 Prob > F = 0.0000 F( 1, 3077) = 21.88 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth airports

Page 36: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0110871 .000308 36.00 0.000 .0104832 .0116909 airports .0017429 .0004284 4.07 0.000 .0009029 .0025829high_lengt~s -3.76e-07 7.74e-07 -0.49 0.627 -1.89e-06 1.14e-06 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00976 Adj R-squared = 0.0065 Residual .29274868 3076 .000095172 R-squared = 0.0071 Model .002104477 2 .001052238 Prob > F = 0.0000 F( 2, 3076) = 11.06 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth high_length_miles airports

Page 37: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0188594 .0007721 24.43 0.000 .0173455 .0203734youthemprate -.0166641 .0016598 -10.04 0.000 -.0199186 -.0134096 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00963 Adj R-squared = 0.0314 Residual .285500966 3077 .000092785 R-squared = 0.0317 Model .00935219 1 .00935219 Prob > F = 0.0000 F( 1, 3077) = 100.79 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth youthemprate

_cons .0206125 .0016478 12.51 0.000 .0173816 .0238434totalemprate -.0134318 .0023647 -5.68 0.000 -.0180683 -.0087952 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00974 Adj R-squared = 0.0101 Residual .291793528 3077 .000094831 R-squared = 0.0104 Model .003059628 1 .003059628 Prob > F = 0.0000 F( 1, 3077) = 32.26 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth totalemprate

Page 38: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0119877 .0018895 6.34 0.000 .008283 .0156925totalemprate -.0228014 .0243243 -0.94 0.349 -.070495 .0248922workingage~e .033683 .0217282 1.55 0.121 -.0089204 .0762863youthemprate -.0204913 .0039113 -5.24 0.000 -.0281604 -.0128222 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00961 Adj R-squared = 0.0359 Residual .283988615 3075 .000092354 R-squared = 0.0368 Model .010864542 3 .003621514 Prob > F = 0.0000 F( 3, 3075) = 39.21 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth youthemprate workingageemprate totalemprate

_cons .0191127 .0017728 10.78 0.000 .0156367 .0225888workingage~e -.0107746 .0024347 -4.43 0.000 -.0155485 -.0060007 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00976 Adj R-squared = 0.0060 Residual .292988405 3077 .000095219 R-squared = 0.0063 Model .001864752 1 .001864752 Prob > F = 0.0000 F( 1, 3077) = 19.58 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth workingageemprate

Page 39: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0090671 .0004528 20.02 0.000 .0081792 .009955 ki .0027874 .0005197 5.36 0.000 .0017685 .0038063 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00974 Adj R-squared = 0.0089 Residual .29212165 3077 .000094937 R-squared = 0.0093 Model .002731506 1 .002731506 Prob > F = 0.0000 F( 1, 3077) = 28.77 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth ki

_cons .0104854 .00032 32.76 0.000 .0098579 .0111128 hi .0034814 .0011334 3.07 0.002 .0012591 .0057037 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00977 Adj R-squared = 0.0027 Residual .29395184 3077 .000095532 R-squared = 0.0031 Model .000901317 1 .000901317 Prob > F = 0.0021 F( 1, 3077) = 9.43 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth hi

Page 40: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0173707 .0015157 11.46 0.000 .0143988 .0203426accessibil~y -.00061 .0001514 -4.03 0.000 -.000907 -.0003131 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00976 Adj R-squared = 0.0049 Residual .293306191 3077 .000095322 R-squared = 0.0052 Model .001546966 1 .001546966 Prob > F = 0.0001 F( 1, 3077) = 16.23 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth accessibility

Page 41: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0042186 .0006293 6.70 0.000 .0029846 .0054525distance_t~t 8.36e-14 7.14e-15 11.71 0.000 6.96e-14 9.76e-14 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00958 Adj R-squared = 0.0424 Residual .282271316 3077 .000091736 R-squared = 0.0427 Model .01258184 1 .01258184 Prob > F = 0.0000 F( 1, 3077) = 137.15 Source SS df MS Number of obs = 3079

. reg totalpcpigrowth distance_to_market

Page 42: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0634634 .0111748 5.68 0.000 .0415525 .0853743 airports .0011786 .0004263 2.76 0.006 .0003428 .0020143workingage~e .0025639 .0043352 0.59 0.554 -.0059364 .0110642youthemprate -.0116003 .002529 -4.59 0.000 -.0165589 -.0066417 ki .0027824 .000657 4.23 0.000 .0014941 .0040706lninitiali~e -.0068983 .0011938 -5.78 0.000 -.0092391 -.0045576percentmor~s .0277121 .0031681 8.75 0.000 .0215003 .0339239percentles~s .0095969 .0041919 2.29 0.022 .0013777 .0178161high_lengt~s -4.46e-07 7.87e-07 -0.57 0.571 -1.99e-06 1.10e-06distance_t~t 4.25e-14 8.05e-15 5.28 0.000 2.67e-14 5.82e-14 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00926 Adj R-squared = 0.1052 Residual .263075644 3069 .00008572 R-squared = 0.1078 Model .031777513 9 .003530835 Prob > F = 0.0000 F( 9, 3069) = 41.19 Source SS df MS Number of obs = 3079

Page 43: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0631671 .0111864 5.65 0.000 .0412335 .0851007workingage~e .0020258 .0043356 0.47 0.640 -.0064751 .0105267youthemprate -.0117032 .0025314 -4.62 0.000 -.0166667 -.0067397 ki .0025355 .0006516 3.89 0.000 .0012577 .0038132lninitiali~e -.0068954 .0011951 -5.77 0.000 -.0092386 -.0045521percentmor~s .029272 .0031208 9.38 0.000 .0231529 .0353911percentles~s .010242 .0041899 2.44 0.015 .0020267 .0184573high_lengt~s 5.45e-07 7.02e-07 0.78 0.437 -8.31e-07 1.92e-06distance_t~t 4.20e-14 8.05e-15 5.22 0.000 2.62e-14 5.78e-14 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00927 Adj R-squared = 0.1032 Residual .263730976 3070 .000085906 R-squared = 0.1056 Model .031122181 8 .003890273 Prob > F = 0.0000 F( 8, 3070) = 45.29 Source SS df MS Number of obs = 3079

> i youthemprate workingageemprate

Page 44: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0762806 .0110451 6.91 0.000 .0546241 .0979372 airports .0009525 .0004248 2.24 0.025 .0001196 .0017853workingage~e .007201 .0043019 1.67 0.094 -.001234 .0156359youthemprate -.0144924 .0025074 -5.78 0.000 -.0194087 -.0095761 hi .0007522 .0012876 0.58 0.559 -.0017724 .0032769lninitiali~e -.0081632 .0011864 -6.88 0.000 -.0104894 -.0058371percentmor~s .0267372 .0031696 8.44 0.000 .0205225 .032952percentles~s .0102764 .0042013 2.45 0.015 .0020388 .018514high_lengt~s -1.22e-06 7.77e-07 -1.57 0.118 -2.74e-06 3.07e-07distance_t~t 4.67e-14 8.02e-15 5.82 0.000 3.10e-14 6.24e-14 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00929 Adj R-squared = 0.1000 Residual .264583407 3069 .000086212 R-squared = 0.1027 Model .030269749 9 .003363305 Prob > F = 0.0000 F( 9, 3069) = 39.01 Source SS df MS Number of obs = 3079

Page 45: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

OLS Results

_cons .0635042 .0113212 5.61 0.000 .0413063 .085702 airports .0012035 .0004274 2.82 0.005 .0003654 .0020416totalemprate -.0089656 .0036322 -2.47 0.014 -.0160873 -.0018438 ki .0036642 .0006237 5.88 0.000 .0024413 .004887lninitiali~e -.0068724 .0012303 -5.59 0.000 -.0092848 -.0044601percentmor~s .0300993 .0031391 9.59 0.000 .0239443 .0362543percentles~s .0117685 .0042226 2.79 0.005 .0034891 .0200479high_lengt~s -3.64e-07 7.90e-07 -0.46 0.645 -1.91e-06 1.18e-06distance_t~t 4.55e-14 8.02e-15 5.67 0.000 2.98e-14 6.12e-14 totalpcpig~h Coef. Std. Err. t P>|t| [95% Conf. Interval]

Total .294853157 3078 .000095794 Root MSE = .00929 Adj R-squared = 0.0997 Residual .26478041 3070 .000086248 R-squared = 0.1020 Model .030072747 8 .003759093 Prob > F = 0.0000 F( 8, 3070) = 43.58 Source SS df MS Number of obs = 3079

Page 46: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Modeling Spatial Relationships

Inverse Distance…

K-Nearest Neighbor…

Contiguity…

Page 47: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Contiguous Counties

Page 48: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

The average county has 5 to 6 neighbors (main point)

How many neighbors does the…

1 2 3 4 5 6 7 8 9 10 11 12 13 140

200

400

600

800

1000

1200

Number of Contiguous Neighbors

Number of Neighbors

Num

ber

of

Counti

es

Page 49: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Global Spatial Autocorrelation

Growth rates display spatial dependence…Moran’s I…Null hypothesis

*1-tail test totalpcpigrowth 0.432 -0.000 0.010 41.176 0.000 Variables I E(I) sd(I) z p-value* Moran's I

Row-standardized: NoType: Imported (binary)Name: W Weights matrix

Measures of global spatial autocorrelation

. spatgsa totalpcpigrowth, weights(W) moran

Page 50: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Own growth rates depend on neighbors (idea)

Moran scatterplot (Moran's I = 0.439)totalpcpigrowth

Wz

z-5 -4 -3 -2 -1 0 1 2 3 4 5 6 7

-3

-2

-1

0

1

2

3

4

5

228 2707

2287

2591

17722362

870

2668

2236323

2673

361

2586

1677

491

206635925471858

2471711419

46424521861

424

1221

9251662

391

221265

2644

440

2098

17712902

691

277

564

2166

1721

245320471243866

61123102196

22822443

2029

1634

10526835114251694

906670

14312531

738

1723

12442019

2544434

1000

1226

17401068

432

1393

2631648

1643

1275

1197

4152025

679

9981873388

1722

2901881

1627

513360

31310131406303530

376

2628

1240

2102

7039461890

804405

69660710641044

1270

132224421350

458

993384963

2369

494

2767

7145792018

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1963

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1969

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1974

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20002704

557

19962363

2623

183

2356

19652555

1576

2163

3063

26072007

2652

26132641

2367

2351

3075

21462382

2537

2557

934

21512554

1769

3078

1124383322603

2629

1979

264

1997

2101

2198884

2697

1107

350

1605

2671774

23492739

156926473071

1970

225

3060

3066

2719

2552

1988

200121392573

3061

307333424901960

1961

1976

3079

1136

2138

2749

2736

10902538

3065

1122

3069

2766

1962

3059

1592

15331624

2358

306219933068

1717

20081959

1394

1116

30771978

1389

2639

1622

1114

2706

1011

2505

25753076

2680

3074

Page 51: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Main Findings

Page 52: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Future Research

Page 53: Economic Growth IN THE UNITED STATES OF AMERICA A County-level Analysis

Questions