USING ECONOMIC BASE MODELS TO EXPLAIN NEW TRENDS IN RURAL INCOME

The economies of urban and rural areas in the United States continue t o experience change in their structure, leading to changes in their ec onomic base. This paper argues that nontraditional sources of income, employment, and business activity have become more important in the ec onomic base of rural areas. Current trends in rural parts of the weste rn United States are used to document this argument. In spite of the d ecline in the relative or absolute importance of traditional natural-r esource-oriented industries in the rural West, in the 1990s this regio n is experiencing population growth rates well above those of the nati on as whole. This reversal of development experience from the 1980s is analyzed empirically, and extended economic base models are proposed to capture forces which now are found to be of growing significance in explaining current development trends in western rural economies.