Modeling Small Businss Growth, Migration behavior, and Household Income in Appalachia: A Spatial Simultaneous Equations Approach

Gebremeskel Gebremariam (), Tesfa Gebremedhin () and Peter Schaeffer
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Gebremeskel Gebremariam: Department of Economics, Virginia Tech
Tesfa Gebremedhin: Regional Research Institute, West Virginia University

Working Papers from Regional Research Institute, West Virginia University

Abstract: In this paper, a spatial simultaneous equations model of business growth, migration behavior and median household income is empirically estimated. The empirical simultaneous model is developed from the equilibrium relationships among these variables where each variable is assumed to adjust to its equilibrium level with a substantial lag through a partial equilibrium adjustment process. We use Generalized Spatial Three-Stage Least Squares estimator to estimate the empirical model using data from 418 Appalachian counties for 1990-2000. The results suggest the existence of very strong interdependences among business growth, migration behavior and median household income in the form of feed-back simultaneities, spatial autoregressive lag simultaneities and spatial cross-regressive lag simultaneities.

Keywords: Appalachia; Simultaneous Model; Small Business; Migration; Household Income (search for similar items in EconPapers)
JEL-codes: P28 R11 R12 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2006
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