Reexamining Rural Decline: How Changing Rural Classifications and Short Time Frames Affect Perceived Growth

Georgeanne Artz and Peter Orazem

No 18222, Working Papers from Iowa State University, Department of Economics

Abstract: Beale codes are an important tool for examining rural urban differences in socioeconomic trends. However, as population changes, counties' designations also change over time. This feature of Beale codes is commonly overlooked by researchers, yet it has important implications for understanding rural growth. Since the fastest growing counties grow out of their rural status, use of the most recent codes excludes the most successful rural counties. Average economic performance of the counties remaining rural significantly understates the true performance of rural counties. This paper illustrates that choice of Beale code can alter conclusions regarding the relative speed of rural and urban growth across a variety of commonly used social and economic indicators. The bias can alter conclusions regarding the magnitude and even the sign of factors believed to influence growth. Most strikingly, the estimated impact of human capital on rural growth is completely reversed when the sample is based on end-of-period rather than start-of-period rural status. The use of short time frames such as a single decade to evaluate relative growth across counties can also yield misleading inferences. Therefore, both academicians and policy-makers must be careful to use appropriate Beale code designations and time frames in evaluating prescriptions for rural growth.

Keywords: Community/Rural/Urban; Development (search for similar items in EconPapers)
Pages: 34
Date: 2005
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Working Paper: Reexamining Rural Decline: How Changing Rural Classifications and Short Time Frames Affect Perceived Growth (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:genres:18222

DOI: 10.22004/ag.econ.18222

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