Moving beyond the modeling of regional economic growth: A study of how income is distributed to rural households

This article discusses the use of regional economic modeling techniques to determine the household income distribution impacts associated with various economic sectors. Determining the distributional characteristics of econom ic sectors requires identifying the relationship between aggregate factor i ncome change and its distribution to local households. Social accounting ma trix analysis provides an analytic framework to track the flow of income fr om local productive activities to households differentiated by income categ ory. Its use is illustrated with an analysis of alternative economic develo pment strategies for a rural region. To the extent that local economic deve lopment policy can differentially influence the level of local productive a ctivity, it becomes possible to assess who benefits by economic growth. Inc orporating information related to income distribution allows local policy m akers to move beyond the pursuit of aggregate economic growth to incorporat e additional objectives that are important to overall regional development.