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Expanding the Economic Base Model to Include Nonwage Income

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  • Nesse, Katherine

Abstract

As baby boomers retire over the next decade, the size of the population relying primari-ly on nonwage income will likely grow considerably. This study argues that it is important to include these income sources in descriptions of regional economies. I modify the location quotient method of calculating the base multiplier to compare the effect of nonwage income with wage and salary income. The location quotient in the expanded model changes from the traditional model by a constant factor related to the relative size of the nonwage income in the region. I demonstrate the model in six commuting zones with different compositions of personal income.

Suggested Citation

  • Nesse, Katherine, 2014. "Expanding the Economic Base Model to Include Nonwage Income," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(2).
    • Handle: RePEc:ags:jrapmc:243967
    DOI: 10.22004/ag.econ.243967
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    References listed on IDEAS

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    1. Cebula, Richard J. & Alexander, Gigi M., 2006. "Determinants of Net Interstate Migration, 2000-2004," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(2), pages 1-8.
    2. Charles M. Tiebout, 1956. "Exports and Regional Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 64, pages 160-160.
    3. Charles M. Tiebout, 1956. "Exports and Regional Economic Growth: Rejoinder," Journal of Political Economy, University of Chicago Press, vol. 64, pages 169-169.
    4. Deborah Roberts, 2003. "The Economic Base of Rural Areas: A SAM-Based Analysis of the Western Isles, 1997," Environment and Planning A, , vol. 35(1), pages 95-111, January.
    5. Douglass C. North, 1955. "Location Theory and Regional Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 63, pages 243-243.
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    Cited by:

    1. James, Ryan D. & Campbell Jr., Harrison S., 2016. "Exploring the Role of Unearned and Non-Wage Income on Regional Income Convergence," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(2), December.
    2. Philippe Poinsot & Jean-François Ruault, 2019. "Economic-base theory and highly-open economies: incorporating day-to- day mobility," Working Papers hal-02269336, HAL.

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