The Future of Rural Policy: Lessons from Spatial Economics

The way in which households and firms trade off economic opportunities (wages, income), living costs (housing) and amenities has profound implications for rural economic policy. Because area effects in earnings are small, not very much affected by policy, and offset by living costs, observed area disparities offer a poor guide to policy. Instead of targeting disparities, rural policy should focus on effective provision of public goods and services in rural areas, and on the wider impacts of rural policy.

This paper investigates lessons learned from previous research performed by the Spatical Economics Research Centre (SERC), London School of Economics.