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Analyzing the Effects of Amenities, Quality of Life Attributes and Tourism on Regional Economic Performance using Regression Quantiles

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  • Gunderson, Ronald J.
  • Ng, Pin T.
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    Abstract

    Conventional wisdom argues that tourist expenditures and recreation activities generate demands for traded goods and services, and create jobs and income for local residents in counties endowed with rich natural amenities. However, more recent studies have suggested that regions with high levels of amenities can experience lower wages and higher unemployment because amenities are capitalized into wages and rents in a manner that can hinder economic growth. Attempting to estimate the impact of tourism and retirement activities on the local economy, a few studies have performed multiple least squares regression analysis to discount activities generated by both local residents and nonresidents who travel for purposes other than tourism. However, the least square regression provides nothing more than an estimate of the average of the response (dependent) variable conditioned on the covariates (independent variables). In almost all regression settings with the exception of the rather naive constant- error-variance setup, the upper and lower quantiles (percentiles) often depend on the covariates quite differently from the mean or the median response. Investigating quantiles other than the mean or median using quantile regression analysis, we have found interesting dependency effects that cannot be discovered otherwise. The results of this analysis provide crucial information to policy makers while discussing public policy effectiveness in natural resource management and community development. If policy is to rely on the structural shift that is taking place in rural America, we need a better understanding on how amenities, quality of life attributes, and tourism affect regional economic performance.

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    Bibliographic Info

    Article provided by Mid-Continent Regional Science Association in its journal Journal of Regional Analysis and Policy.

    Volume (Year): 35 (2005)
    Issue (Month): 1 ()
    Pages:

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    Handle: RePEc:ags:jrapmc:132298

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    Related research

    Keywords: Community/Rural/Urban Development; Labor and Human Capital; Public Economics;

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    1. Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
    2. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
    3. Roback, Jennifer, 1988. "Wages, Rents, and Amenities: Differences among Workers and Regions," Economic Inquiry, Western Economic Association International, vol. 26(1), pages 23-41, January.
    4. Steven C. Deller & Tsung-Hsiu (Sue) Tsai & David W. Marcouiller & Donald B.K. English, 2001. "The Role of Amenities and Quality of Life In Rural Economic Growth," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 352-365.
    5. Deller, Steven C. & Tsai, Tsung-Hsiu (Sue), 1998. "An Examination of the Wage Curve: A Research Note," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 28(2).
    6. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    7. John C. Leatherman & David W. Marcouiller, 1996. "Estimating Tourism's Share Of Local Income From Secondary Data Sources," The Review of Regional Studies, Southern Regional Science Association, vol. 26(3), pages 317-339, Winter.
    8. Paul D. Gottlieb, 1994. "Amenities as an Economic Development Tool: Is there Enough Evidence?," Economic Development Quarterly, , vol. 8(3), pages 270-285, August.
    9. John E. Wagner & Steven C. Deller, 1998. "Measuring the Effects of Economic Diversity on Growth and Stability," Land Economics, University of Wisconsin Press, vol. 74(4), pages 541-556.
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    Cited by:
    1. Ronald Gunderson & Pin Ng, 2006. "Summarizing the Effect of a Wide Array of Amenity Measures into Simple Components," Social Indicators Research, Springer, vol. 79(2), pages 313-335, November.
    2. Chi, Guangqing & Marcouiller, David W., 2012. "Recreational Homes and Migration to Remote Amenity-Rich Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 42(1).
    3. Gunderson, Ronald J. & Sorenson, David J., 2010. "An Examination of Domestic Migration from California Counties," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(1).

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