The Economics of Ghost Towns
Journal of Regional Analysis and Policy, Vol. 39, No. 2, pp. 131-140, 2009
10 Pages Posted: 25 Jan 2010
Date Written: 2009
The ghost towns of the American West are both intriguing historical artifacts and reflections of unique economic forces at work. In this study we develop linked labor and housing market models balancing the wages, rents, and local amenities of isolated boomtown sites to better understand the sources of such communities’ dramatic cycles. High variance boomtowns provide a unique context for investment in housing and other foundational infrastructure, leading directly to the unusually transient local development patterns seen in ghost town settings. We use Colorado-based case studies to illustrate the relevance of the model. Comparisons with more modern rural settings in Appalachia and the Midwest suggest that the model provides a framework to better understand the process of rural decline more generally.
Keywords: ghost towns, hedonic analysis, wage compensation, rent compensation, boomtowns
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