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“Functional economic areas” are multicounty regions, generally centered around third-order central places, and have been suggested by Professor Karl A. Fox as logical spatial units for local economic development analysis and policy formation.
See especially W. Isard,Methods of Regional Analysis, ch. 5 and Harvey S. Perloff,Regional Studies at U.S. Universities, (Washington, D.C., Resources for the Future, Inc., 1957).
R. B. Andrews, “Mechanics of the Urban Economic Base” a collection of reprints of articles inLand Economics, XXIX–XXXI, 29–31 (May, 1953–February, 1956).
Lewis C. Copeland,Methods for Estimating Income Payments in Counties (University of Virginia, Bureau of Population and Economic Research, 1952) contains descriptions of techniques and an excellent bibliography of work up to that period. Since then there have been few methodological developments, but several in regard to data retrieval.
For examples and discussion of “convergence” studies see R. Easterlin, “Interregional Differences in Per Capita Income, Population and Total Income, 1840–1950,” National Bureau of Economic Research,Studies in Income and Wealth, XXIV, and G. Borts and J. Stein, “Investment Return as a Measure of Comparative Regional Economic Advantage” in W. Hochwald, ed.,Design of Regional Accounts, (Baltimore, Johns Hopkins University Press, 1961).
Note the prominence given to these articles in John Meyer, “Regional Economics: A Survey,”The American Economic Review, March, 1963.
J. Herbert and B. Stevens, “A Model for the Distribution of Residential Activity in Urban Areas,”Journal of Regional Science, Fall, 1960, and B. Harris, “Linear Programming and the Projection of Land Use,” Penn-Jersey Paper No. 20, Penn-Jersey Transportation Study, 1963.
Interestingly, the item of earlier work which probably most nearly anticipated current work in regional accounts, “Oskaloosa vs. the World,”Fortune, April, 1938, is not even referred to in the Andrews work. Another example of earlier work anticipating later developments is various unpublished manuscripts of Professor David Crane, Department of City Planning at the University of Pennsylvania, in connection with a study of Massachusetts communities which was done in the late forties.
Andrews,op. cit., “Mechanics of the Urban Economic Base” a collection of reprints of articles inLand Economics, XXIX–XXXI, 29–31 (May, 1953–February, 1956), for a description of this study.
Although not in economic base terms, theFortune article cited earlier would have to be regarded as an exposition of regional economic structure.
C. L. Leven, “An Appropriate Unit for Measuring the Urban Economic Base,”Land Economics, November, 1954.
The first explicit formulation of income and product accounts for a region occurred as part of the background analysis for a series of community studies appearing in the 1954 Annual Report of the Federal Reserve Bank of Chicago. Their formulation was jointly conceived, though perhaps not for the first time, by the present author and Professor Dick Netzer, both then members of the bank's research staff.
Leven, “Regional Income and Product Accounts: Construction and Applications,” in W. Hochwald, ed.,Design of Regional Accounts, (Baltimore, Johns Hopkins University Press, 1961) for further discussion of the treatment of indirect exports.
C. M. Tiebout, “Regional and Interregional Input-Output Models: An Appraisal,”The Southern Economic Journal, October, 1957.
As examples see W. Hirsch, “Application of Area Input-Output Analysis,”Regional Science Association Papers and Proceedings, V (1959); W. Isard and R. Kuenne, “The Impact of Steel upon the Greater New York-Philadelphia Industrial Region,The Review of Economics and Statistics, XXXV, November, 1953; F. Moore and J. Peterson, “Regional Analysis: An Interindustry Model of Utah,”The Review of Economics and Statistics, November, 1955; and W. Hochwald, H. Striner, and S. Sonenblum,Local Impact of Foreign Trade, (Washington, D.C., National Planning Association, 1960).
And in some cases, they assumed that the regional coefficients were equal to those for the United States.
Leven,op. cit., “An Appropriate Unit for Measuring the Urban Economic Base,”Land Economics, November, 1954, for a discussion of this point.
Penelope Hartland,Balance of Interregional Payments of New England, (Providence, Brown University Studies, XIV, 1950) and G. Hile, “The Balance of Payments of the Southeast in 1950,”Regional Science Association Papers and Proceedings, I (1955).
C. Leven and H. Perloff, “Towards An Integrated System of Regional Accounts; Stocks, Flows and the Analysis of the Public Sector,” in W. Hirsch, ed.Studies in Regional Accounts, (Baltimore, Johns Hopkins University Press, 1964) footnote 8, for a suggestion on this point that was made by Professor Ruth Mack.
C. M. Tiebout,Markets for California Products, (Sacramento, California Development Agency, 1962) and E. Hoover,et al., Region with a Future, (Pittsburgh, University of Pittsburgh Press, 1964).
Leven,op. cit. “An Appropriate Unit for Measuring the Urban Economic Base,”Land Economics, November, 1954.
Tiebout,-op. cit..
Hirsch, “A General Structure for Regional Economic Analysis,” in W. Hochwald,-op. cit..
H. Perloff, “Relative Regional Economic Growth: An Approach to Regional Accounts,” in W. Hochwald,-op. cit., and C. Leven and H. Perloff,op. cit. “Towards An Integrated System of Regional Accounts; Stocks, Flows and the Analysis of the Public Sector,”
For example, L. Moses, “The Stability of Interregional Trading Patterns and Input-Output Analysis,”The American Economic Review, December, 1955.
Leven,op. cit., and L. Metzler, “A Multiple Region Theory of Income and Trade,”Econometrica, October, 1950.
It should be noted that disclosure problems are becoming less serious. The Bureau of the Census will process individual respondent data for nongovernment researchers where the results, but not the individual respondent data, are sufficient. What still is needed is a way of confidentially processing individual respondent data from the census with individual respondent data from a variety of other sources without disclosure to the researcher or the respective statistical agencies. This is a useful function which might be solved through the establishment of regional data centers.
That such information could be collected by a federal agency is, of course, true, but this would represent a new data gathering task.
For further comment on this point see R. Ruggles and N. Ruggles, “Regional Breakdowns of National Economic Accounts” in Hochwald,-op. cit..
For a fuller discussion of these limitations see H. Blumenfeld, “The Economic Base of the Metropolis,”Journal of the American Institute of Planners, Fall, 1955, and C. L. Leven,Theory and Method of Income and Product Accounts for Metropolitan Areas (Pittsburgh, Center for Regional Economic Studies, University of Pittsburgh, 1963, reprint).
C. L. Leven, “A Theory of Regional Social Accounting,”Regional Science Association Papers and Proceedings, 1958, for further discussion of this point.
E. Ullman and M. Dacey, “The Minimum Requirements Approach to the Urban Economic Base,”Regional Science Association Papers and Proceedings, 1960.
The published data based on field survey can be found in Sioux City Planning and Zoning Commission, “Economic Report, 1959.”
For a justification, see Leven,-loc. cit. “, pp. 53–55.
In earlier statements, this term was ambiguously defined simply as “income produced in the region,” with no allowance for subtraction of capital consumption allowances of domestic establishments.
For a complete description of the specific system of which this relationship is a part, see Leven, “Regional Income and Product Accounts, Construction and Application,” in Hochwald,-op. cit..
The author is indebted to Sigmund Wolkomir, a student in his course in regional analysis, for suggesting the points raised in this paragraph.
Leven,-loc. cit. “.
Leven,-op. cit. “, p. 170.
For derivation of the formula see Leven,-loc. cit. “, p. 236, and for the reconciliation between the definitions of value added and gross product see Leven,op. cit. “Regional Income and Product Accounts: Construction and Applications,” in W. Hochwald, ed.,Design of Regional Accounts, (Baltimore, Johns Hopkins University Press, 1961), footnote 17.
The symbolV x did not appear in earlier versions of the author's work. It is not to be confused, however, withV e the value addeddirectly and indirectly in production for export.V x is direct value added only. Its symbolic equivalent in Leven,-op. cit. “ would bev i e ; (i=1,...,n).
Tiebout-op cit..
Although their support typically would be accounted for as a transfer from abroad.
Outlays on local goods of the institutions with which they were associated might, however, be classed as exports if these were instrumentalities of nonlocal government.
For a discussion of the problems of assymetry between alternative definitions see W. Hochwald, “Conceptual Issues of Regional Income Estimation,” in National Bureau of Economic Research,Studies in Income and Wealth, XXI.
The relationships of size to gross export sales would probably not be so regular due to wide variations in the imported raw material component of different commodities in different places.
See Tiebout's exchange with North some years ago. The real limitation of that discussion was that the only real alternative explanatory variables considered explicitly were autonomous investment or shifts in the consumption function; in short, traditional Keynesian variables, which are most applicable only to problems of change in the short run. See Tiebout, “Exports and Regional Economic Growth,” North, “A Reply,” and Tiebout, “Rejoinder,”Journal of Political Economy, April, 1956.
Moreover, in a more realistic situation where we assumed some small but not increasable amount of initial trade throughout, the process could be accelerated by induced agglomeration of industries to supply input needs of domestic producers; in this case, exports might actually decrease!
I am indebted to my former colleague, Professor Nathan Rosenberg, now of Purdue University, for reacquainting me with the fact that Adam Smith did have something useful to say about economic development.
This discussion of the export sector really opens up anew the whole question of geographic delimitation of regions. For the most part, metropolitan regions have been defined so as to approximate a closed labor market. A closed retail shopping market also could be used as a definition. In this case, though, we would have to be prepared to find more overlapping of adjacent areas than in the case of labor market areas. In any event, this is outside the scope of this paper.
In much of the author's earlier work, the government sector was suppressed into the other sectors, but this was mainly for reasons of expedience or simplicity. It was never argued that these were generally defensible grounds for such treatment.
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Leven, C.L. Regional and interregional accounts in perspective. Papers of the Regional Science Association 13, 127–144 (1964). https://doi.org/10.1007/BF01942565
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DOI: https://doi.org/10.1007/BF01942565