Natural Resource Dependence and Rural American Economic Prosperity From 2000 to 2015

Abstract

Research suggests dependence on natural resource development leads to decreases in per capita income, increases in inequality, and elevated poverty. Natural resource development generally takes two forms—extractive (e.g., oil and gas, mining, timber) and nonextractive (e.g., tourism, recreation, real estate). However, research has rarely examined both in tandem. Drawing on the concept of dependence (i.e., overspecialization), the author tests the hypothesis that increasing levels of both forms of development were associated with diminishing returns to economic prosperity—operationalized as per capita income, inequality, and poverty—in rural America over the period of 2000 to 2015. Extractive development exhibited the expected relationship in remote rural counties for all outcomes, while nonextractive development had a generally negative relationship with per capita income, a positive relationship with poverty, and no relationship with inequality. Support for the overall hypothesis was limited due to the returns of nonextractive development being more negative than expected.