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Rural-Urban Interdependence: A Framework Integrating Regional, Urban, and Environmental Economic Insights

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  • JunJie Wu
  • Bruce A. Weber
  • Mark D. Partridge

Abstract

Economic development in rural areas affects the natural environment, which in turn affects economic growth—both rural and urban. These shared interests and feedback effects in the natural environment are increasingly recognized as important economic and political issues, and necessitate a new framework for better understanding them. This article asks why such a framework does not exist and why it should be developed. It then presents such a framework by integrating regional, urban, and environmental economic insights. The framework focuses on the interactive location decisions of firms and households and centripetal forces for concentration and centrifugal forces for decentralization. The article captures the economic and environmental consequences of rural-urban relocation and feedback effects through changes in agglomeration economies, congestion costs, natural and social amenities, and the location of economic opportunities. Results show that some feedback effects reinforce the initial forces, but others weaken them. We present two examples to demonstrate the application of the framework. The first focuses on how agglomeration economies affect the effectiveness of environmental regulation and illustrates the benefits of incorporating regional and urban economic insights into environmental policy analysis. The second example focuses on how conservation policy can create localized amenities that help resource-rich regions avoid the natural resource curse and illustrates how concepts and perspectives from resource and environmental economics can improve our understanding of regional and rural issues.

Suggested Citation

  • JunJie Wu & Bruce A. Weber & Mark D. Partridge, 2017. "Rural-Urban Interdependence: A Framework Integrating Regional, Urban, and Environmental Economic Insights," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(2), pages 464-480.
  • Handle: RePEc:oup:ajagec:v:99:y:2017:i:2:p:464-480.
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    File URL: http://hdl.handle.net/10.1093/ajae/aaw093
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    Citations

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    Cited by:

    1. Schmit, Todd M. & Jablonski, Becca B.R. & Bonanno, Alessandro & Johnson, Thomas G., 2021. "Measuring stocks of community wealth and their association with food systems efforts in rural and urban places," Food Policy, Elsevier, vol. 102(C).
    2. Juliane Haensch & Sarah Ann Wheeler & Alec Zuo, 2021. "Explaining permanent and temporary water market trade patterns within local areas in the southern Murray–Darling Basin," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 318-348, April.
    3. Li Yao & Xiaolu Li & Qiao Li & Jiankang Wang, 2019. "Temporal and Spatial Changes in Coupling and Coordinating Degree of New Urbanization and Ecological-Environmental Stress in China," Sustainability, MDPI, vol. 11(4), pages 1-16, February.

    More about this item

    Keywords

    Concentration; decentralization; nature-human interaction; rural-urban independency; urbanization; ruralization;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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