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Assessing Economic Base Relationships in South Dakota

  • Sorenson, David J.
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    Despite enduring criticism of both the conceptual foundation and empirical implementa-tion of economic base models, recent research has continued to investigate the validity and es-timation of such models. This paper applies economic base models to South Dakota and three of its counties in order to assess the applicability of the model and to estimate aggregated ba-sic sector multipliers and sector-specific multipliers. Time series analysis of annual, quarterly, and monthly data reveals a variety of multiplier magnitudes dependent on the particular spe-cification, data bifurcation method, and geographic unit. Distinct sector-specific multipliers are identified, including instances of dominant sectors with little influence beyond the direct basic sector change. Neither informal models of annual data nor VAR analysis of monthly data supports Granger causality from basic to nonbasic activity. In contrast to several other re-cent studies, cointegration of basic and nonbasic employment is not evident.

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

    Volume (Year): 37 (2007)
    Issue (Month): 2 ()

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    Handle: RePEc:ags:jrapmc:132417
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    1. Thomas R. Harris & J. Scott Shonkwiler & George E. Ebai, 1999. "Dynamic Nonmetropolitan Export-Base Modeling," The Review of Regional Studies, Southern Regional Science Association, vol. 29(2), pages 115-138, Fall.
    2. Cutler, Harvey & England, Scott & Weiler, Stephan, 2003. "Determining Regional Structure through Cointegration," The Review of Regional Studies, Southern Regional Science Association, vol. 33(2), pages 164-83.
    3. Lego, Brian & Gebremedhin, Tesfa G. & Cushing, Brian, 2000. "A Multi-Sector Export Base Model Of Long-Run Regional Employment Growth," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(2), October.
    4. Lesage, James P. & Reed, J. David, 1989. "The dynamic relationship between export, local, and total area employment," Regional Science and Urban Economics, Elsevier, vol. 19(4), pages 615-636, December.
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