Doctoral Dissertations

Date of Award

8-1970

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

Joe A. Martin

Committee Members

Irving Dubov, M. B. Badenhop, William E. Cole

Abstract

Despite large investments in natural resource projects, economic growth in the Tennessee Valley region during the decade from 1950 to 1960 was not evenly spread across the region. In an attempt to analyze the effectiveness of natural resource investments in stimulating regional economic growth, this study was undertaken. The overall objectives of this study were: (1) to ascertain the factors that determine the rate of economic growth in the counties making up the Tennessee Valley Region and (2) to assess the multistatistical approach as a method of analysis in regional research. The specific objectives of the study were; (1) to determine the relationship of various types of socio-economic changes with the level and pace of economic development and growth in the Tennessee Valley Region, (2) to estimate the relationships between various kinds and amounts of invest-ments in natural resources and the economic growth of the Tennessee Val-ley region, and (3) to discover the causes of disparity in the rate of economic growth between counties in the Tennessee Valley region. In the study, it was hypothesized that regional economic growth is a function of the socio-economic characteristics of the region in question. To test this hypothesis, observations on the various socio-economic variables thought to affect regional growth were collected from secondary sources for the 150 county study region. The data were subjected to various multivariate statistical procedures. Principal component analysis was applied to the data that was designed to measure the magnitude of economic change which occurred in the region between 1950 and 1960. The results of this analysis pro-vided an index of economic growth in which the most important variables were; (1) change in median income of all families, (2) rate of popula-tion change, and (3) change in total payroll per capita. On the basis of this index, the counties in the study area were divided into four groups representing different rates of economic growth. An examination of these groups indicated that economic growth occurred most rapidly in urban-industrial complexes located along rivers or waterways which had received natural resource investments in the form of dams or steam generator plants. Multiple discriminant analysis was used to test the significance of the four groups of counties identified by the principal component analysis. The results of this analysis indicated that the four groups were significantly different from each other. The analysis also indi-cated that the most important variables in discriminating among the four groups were: (1) median school years completed, (2) average size of house-hold, (3) non-worker to worker ratio, (4) location of TVA steam generator plants and location of TVA dams. Factor analysis was used as an objective method for formulating hypotheses about regional economic growth and in selecting dependent variables which constituted the basic or functional unities of a complex system of interrelated variables. The factor analysis was applied to two sets of variables. The first factor analysis was applied to 25 variables and extracted seven factors. These factors were identified as: (1) Extent of Poverty, (2) Sub-Marginal Agriculture, (3) Labor Force Maturity, (4) Inadequate Natural Resource Investments, (5) Extent of Metropolitan Work Opportuni-ties, (6) Labor Force Productivity, and (7) Extractive. The relationship between the seven factors and regional economic growth was analyzed by regressing the index of economic growth derived by principal component analysis on the seven factors. This analysis resulted in a regression 2 equation with an R2 of 0.76 and four significant independent variables at the .01 level. The four independent variables having significant regression coefficients were; (1) Extent of Poverty, (2) Sub-Marginal Agriculture, (3) Labor Force Maturity, and (4) Labor Force Productivity. The second factor analysis derived 10 factors from 38 variables: (1) Level-of-Living, (2) Natural Resource Investments, (3) Population Maturity, (4) Sub-Marginal Agriculture, (5) Agricultural Employment, (6) Ruralism, (7) Extensiveness, (8) Welfare Needs, (9) Local Government Ineptness, and (10) Immobility, In a regression equation, these 10 factors explained 98 percent of the variation in the index of economic growth and had eight signifi-cant regression coefficients at the .01 level. The two variables with non-significant regression coefficients were: (1) Natural Resource Invest-ments and (2) Immobility. The findings of the study supported the following hypotheses: (1) regional economic growth is a function of the socio-economic charac-teristics of the region, and (2) the observed socio-economic characteristics can be analyzed by various multivariate statistical procedures as a means for gaining an understanding of the process of regional economic growth.

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