A study on economic diversity and economic stability

Includes bibliographical references (pages 48-50)The hypothesis that economic diversity promotes economic stability has always been attractive to planners and economic development officials. However, research has failed to prove that a clear relationship exists. This research tests the hypothesis that diversity promotes stability at the county level across the nine census regions of the United States. The analysis uses county employment data from isolated counties of 5,000 to 461,000 population for years 1977 to 1985. An intercept-shift model is used to determine if the diversity/stability relationship exists. The regression model is also used to determine if individual census regions are inherently more stable and whether certain regions are more stable over time. An Adjusted Minimum Requirements index was used to measure diversity while stability was measured with the Regional Economic Instability index. The results from this research show no significant relationship between diversity and stability. When looking at the results across time, the regions behaved similarly and became inherently more stable during economic upswings.M.S. (Master of Science