Fall 2003 ECON 376

Student insights about regional issues, opportunities or threats related to the “3 foundation stones” of spatial economics. We will prove and elaborate these correct statements during the semester:

1. Places on lakes or rivers have transport, recreation, scenic, power, irrigation, and other advantages over land-locked places. A polluted waterway is a squandered local endowment.

2. The time it takes to transport goods and people is much more important than the out-of-pocket transport cost.

3. Iowa’s centrality is both a locational advantage and a disadvantage. It is equally close(far) to(from) all U.S. seaports and coastal population centers.

4. Some types of businesses prefer to locate near each other (to capture economies of scale). Other types of businesses prefer to spread out to avoid competition.

5. Larger cities grow faster than small towns. It is difficult for small and remote places to enjoy agglomeration economies of scale. Why would businesses want to move to or locate in places where little else is going on?

6. Where transport costs to markets are high, the payoff to agricultural production is low, so farm investment is low and farm productivity remains low.

7. Scenic places attract population, but maybe not the economically active ones.

8. A lack of employment opportunities for skilled people is both a cause and a consequence of declining population in a place.

9. Rural poor people migrate into cities to find work and a higher standard of living. City poor people migrate out of cities to avoid overcrowding, pollution, high rents, and high unemployment.

10. Agriculture is not a “growth” industry. So, states specializing in agriculture aren’t likely to be high-growth states.

11. Businesses and people may be repelled by the taxes a jurisdiction must collect to pay for the incentives, subsidies, or civic improvements that are intended to attract those same people and businesses.