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Metropolitan Statistical Area Designation: Aggregate And Industry Growth Impacts

Author

Listed:
  • George Hammond

    (Bureau of Business and Economic Research, West Virginia University)

  • Brian J. Osoba

    (Institute for Policy & Economic Development, University of Texas at El Paso)

Abstract

The federal Office of Management and Budget’s (OMB) periodic release of updated metropolitan statistical area (MSA) definitions frequently garners significant attention from local economic development professionals and policymakers. The interest is grounded, in part, in the common belief that the designation of a region as a new MSA will spur its subsequent growth. The purpose of this paper is to test the hypothesis that the MSA designation influences local growth, using Office of Management and Budget (OMB) designations released since 1980 and data on per capita personal income, population, and employment. Based on results from several methods, including quasiexperimental matching, we find little evidence that the MSA designation has a significant impact on long-term employment or per capita income growth. However, we do find some evidence in favor of a short-run impact on aggregate employment growth and more significant impacts on population growth. We disaggregate employment and find significant short-run impacts on transportation and utilities; retail trade; and government. We find longer-term impacts on services and finance, insurance, and real estate employment growth

Suggested Citation

  • George Hammond & Brian J. Osoba, 2007. "Metropolitan Statistical Area Designation: Aggregate And Industry Growth Impacts," Working Papers 07-01, Department of Economics, West Virginia University.
  • Handle: RePEc:wvu:wpaper:07-01
    as

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    File URL: http://be.wvu.edu/phd_economics/pdf/07-01.pdf
    File Function: First version, January 2007
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    References listed on IDEAS

    as
    1. Duffy-Deno, Kevin T. & Eberts, Randall W., 1991. "Public infrastructure and regional economic development: A simultaneous equations approach," Journal of Urban Economics, Elsevier, vol. 30(3), pages 329-343, November.
    2. repec:hoo:wpaper:e-95-4 is not listed on IDEAS
    3. Chandra, Amitabh & Thompson, Eric, 2000. "Does public infrastructure affect economic activity?: Evidence from the rural interstate highway system," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 457-490, July.
    4. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
    5. Rephann, Terance & Isserman, Andrew, 1994. "New highways as economic development tools: An evaluation using quasi-experimental matching methods," Regional Science and Urban Economics, Elsevier, vol. 24(6), pages 723-751, December.
    6. George Hammond, 2006. "A time series analysis of U.S. metropolitan and non-metropolitan income divergence," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(1), pages 81-94, March.
    7. Andrew M. Isserman, 2005. "In the National Interest: Defining Rural and Urban Correctly in Research and Public Policy," International Regional Science Review, , vol. 28(4), pages 465-499, October.
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