IDEAS home Printed from https://ideas.repec.org/p/fip/fedrwp/18-16.html
   My bibliography  Save this paper

Distance and Decline: The Case of Petersburg, Virginia

Author

Listed:
  • Raymond E. Owens
  • Santiago Pinto

Abstract

Petersburg, Virginia, prospered over two centuries as a center of production and trade. However, the city experienced economic difficulties beginning in the 1980s as a large number of layoffs at production plants in the area coincided with an erosion of retail trade in the city. Prolonged economic decline followed. In contrast, somewhat similar shocks in other moderate-sized cities in Virginia were followed by gradual economic recovery. We examine these differing outcomes and offer an explanation that hinges on the proximity of Petersburg to its larger neighbor, the greater Richmond area. We find evidence suggesting that after the job declines, higher-skilled residents in Petersburg initially commuted to jobs nearer to Richmond, later relocating from Petersburg toward Richmond--an option not readily available in the other Virginia cities considered. We suggest that, as a result, Petersburg suffered a sharp decline in tax revenues and that municipal costs could not be proportionately scaled down, leading to severe fiscal stress.

Suggested Citation

  • Raymond E. Owens & Santiago Pinto, 2018. "Distance and Decline: The Case of Petersburg, Virginia," Working Paper 18-16, Federal Reserve Bank of Richmond.
  • Handle: RePEc:fip:fedrwp:18-16
    as

    Download full text from publisher

    File URL: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/working_papers/2018/pdf/wp18-16.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hoyt Bleakley & Jeffrey Lin, 2012. "Portage and Path Dependence," The Quarterly Journal of Economics, Oxford University Press, vol. 127(2), pages 587-644.
    2. Gilles Duranton & Diego Puga, 2000. "Diversity and Specialisation in Cities: Why, Where and When Does it Matter?," Urban Studies, Urban Studies Journal Limited, vol. 37(3), pages 533-555, March.
    3. Anne Burnett & Raymond E. Owens & Santiago Pinto, 2017. "The Rise and Decline of Petersburg, Va," Econ Focus, Federal Reserve Bank of Richmond, issue 4Q, pages 28-32.
    4. Henderson, J. Vernon, 2005. "Urbanization and Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 24, pages 1543-1591, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    2. Longhi, Christian & Musolesi, Antonio & Baumont, Catherine, 2014. "Modeling structural change in the European metropolitan areas during the process of economic integration," Economic Modelling, Elsevier, vol. 37(C), pages 395-407.
    3. Frick, Susanne A. & Rodríguez-Pose, Andrés, 2018. "Change in urban concentration and economic growth," World Development, Elsevier, vol. 105(C), pages 156-170.
    4. Castells-Quintana, David, 2017. "Malthus living in a slum: Urban concentration, infrastructure and economic growth," Journal of Urban Economics, Elsevier, vol. 98(C), pages 158-173.
    5. Sellars, Emily & Alix-Garcia, Jennifer, 2018. "Locational fundamentals, trade, and the changing urban landscape of Mexico," 2018 Annual Meeting, August 5-7, Washington, D.C. 274238, Agricultural and Applied Economics Association.
    6. Alix-Garcia, Jennifer & Sellars, Emily A., 2020. "Locational fundamentals, trade, and the changing urban landscape of Mexico," Journal of Urban Economics, Elsevier, vol. 116(C).
    7. Gilles DURANTON, 2012. "La Croissance Urbaine : Déterminismes Vs Bruit," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 36, pages 11-30.
    8. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    9. Duranton, Gilles, 2010. "Urban Growth: Trends Vs. Noise," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 19(ex).
    10. Charlie Karlsson & Jonna Rickardsson & Joakim Wincent, 2021. "Diversity, innovation and entrepreneurship: where are we and where should we go in future studies?," Small Business Economics, Springer, vol. 56(2), pages 759-772, February.
    11. David Castells-Quintana & Vicente Royuela, 2018. "Spatially blind policies? Analysing agglomeration economies and European Investment Bank funding in European neighbouring countries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 60(3), pages 569-589, May.
    12. Flückiger, Matthias & Ludwig, Markus, 2017. "Malaria suitability, urbanization and persistence: Evidence from China over more than 2000 years," European Economic Review, Elsevier, vol. 92(C), pages 146-160.
    13. Sandy Fréret & Denis Maguain, 2017. "The effects of agglomeration on tax competition: evidence from a two-regime spatial panel model on French data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(6), pages 1100-1140, December.
    14. Apostolos Baltzopoulos & Pontus Braunerhjelm & Ioannis Tikoudis, 2016. "Spin-offs: why geography matters," Journal of Economic Geography, Oxford University Press, vol. 16(2), pages 273-303.
    15. Carlo Ciccarelli & Torben Dall Schmidt, 2022. "The impact of history on regional development," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 42(3), pages 219-225, December.
    16. Frensch, Richard & Fidrmuc, Jarko & Rindler, Michael, 2023. "Topography, borders, and trade across Europe," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 816-832.
    17. Sandra Sequeira & Nathan Nunn & Nancy Qian, 2020. "Immigrants and the Making of America," Review of Economic Studies, Oxford University Press, vol. 87(1), pages 382-419.
    18. Dorine Cornet & Jean Bonnet & Sébastien Bourdin, 2022. "Digital entrepreneurship indicator (DEI): an analysis of the case of the greater Paris metropolitan area," Post-Print hal-03886445, HAL.
    19. Chenzi Xu, 2022. "Reshaping Global Trade: The Immediate and Long-Run Effects of Bank Failures [“Shift-Share Designs: Theory and Inference,”]," The Quarterly Journal of Economics, Oxford University Press, vol. 137(4), pages 2107-2161.
    20. Boslett, Andrew & Hill, Elaine & Ma, Lala & Zhang, Lujia, 2021. "Rural light pollution from shale gas development and associated sleep and subjective well-being," Resource and Energy Economics, Elsevier, vol. 64(C).

    More about this item

    Keywords

    spatial equilibrium; urban decline;

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedrwp:18-16. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Pascasio (email available below). General contact details of provider: https://edirc.repec.org/data/frbrius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.