Spatial effects of 'mill' closures: Does distance matter?

When small towns experience a major shock, such as a 'mill' closure, the effects can be devastating. We analyse the effects of two major meat works closures in New Zealand, Patea (1982) and Whakatu (1986). These examples provide an interesting comparison: Whakatu is located close to a city, while Patea is relatively isolated. We describe the impacts of these shocks on population, employment and housing in each town, and contrast adjustment dynamics resulting from their differing locations. Both towns experience negative population and employment impacts; however, consistent with benefits of a near-city location, the effects on Whakatu are mainly temporary, whereas the effects on Patea are more permanent. Population age-groups respond differently to the shocks, consistent with homeownership being a factor stifling migration responsiveness. The results have implications for regional development policy and programmes designed to stimulate homeownership.