Spatial Interaction in Sparsely Populated Regions: An Hierarchical Economic Base Approach

Abstract

Ideas from the central place literature are applied to the problem of describing the economic interaction that occurs among centers in sparsely settled regions. A method is proposed that allows the impact of an exogenous change in income or employment to be traced through the functional economic hierarchy. The model is estimated from cross section data for a sample of over 100 counties. The results are shown to have operational significance for estimating the size and spatial distribution of induced employment and income effects resulting from any given spatial distribution of basic economic activity. The approach is relevant to the formulation of economic forecasting models and to economic impact assessment, especially in resource based areas in which interindustry transactions within the manufacturing sector are relatively unimportant.