Energy and Location
It is a plausible and appealing hypothesis that higher energy prices have considerable impact on geographic distributions of population and economic activity. This paper considers aspects of that basic hypothesis, focusing particularly on nonmetro and rural impact. Some caveats should be noted immediately. First, good data are sparse, and probably even sparser than usual in social science research. Second, the perception of energy price increases tends to be exaggerated because deflation by an index of the general price level is not always carried out; because energy price controls have had some impact; and because nonenergy margins (middlemen markups) can comprise a large portion of the price facing the consumer. Finally, many energy impacts seem only weakly related to geography. Thus, responses to higher gasoline prices include: (1) mandated increases in auto fuel efficiency; (2) a switch to smaller cars; (3) carpooling; (4) less social-recreational travel; (5) more work at home; and (6) reduction of distance between residence and workplace, by changing one or both of those locations. Only some of these items are strongly related to geography, and their relative importance is not obvious.
However, some recent changes at the regional level are relatively easy to document, and seem to fit the hypothesis of significant impacts on location from energy price changes.
A consideration of the regional evidence will be followed by a discussion of rural and nonmetro impacts, first in
I benefited from constructive comments by Amos Hawley, Sara Mazie, and Wilbur Zelinsky. John Mankin typed the several drafts of the manuscript.