Theory, Methods and Public Policy
New Horizons in Environmental Economics series
Edited by Gary Paul Green, Steven C. Deller and David D. Marcouiller
Chapter 2: The Supply of Natural Amenities: Moving from Empirical Anecdotes to a Theoretical Basis
David W. Marcouiller and Greg Clendenning INTRODUCTION Natural resources continue to play an important role in deﬁning the structure and viability of rural communities across North America. Historically, natural resources have provided location-speciﬁc advantages for communities at various stages of their development. In early stages, extractive industries (farming, forestry, mining and ﬁshing) utilized natural resources as physical raw materials for processed goods thus creating plentiful and relatively high-paying job opportunities. As communities develop, traditional dependencies have given way to alternative foundations. In essence, many rural communities have experienced a paradigmatic shift in perceptions of what is comprised by the regional natural resource endowment and the manner in which these natural resources are utilized. Several forces have come together to fundamentally alter the manner in which natural resources act as engines of economic growth. With the exception of oil production, international competition has led resource extractive industries of the US to lose their price competitiveness in world commodity markets (Freudenburg 1992; Glaston and Baehler 1995; Pulver 1995; Weber 1995). Also, economic restructuring of the American economy toward a service base has signiﬁcantly tempered the importance of physical raw material inputs for production of manufactured goods (Bluestone and Harrison 1982; Chevan and Stokes 2000). Finally environmental awareness and political activism of urban audiences have provided strong criticism of extractive production practices by emphasizing adverse environmental impacts, threats to biodiversity and sustainability and global environmental change (Buttel 1995; Castle 1993). These regional resource and development issues have forced a reexamination...
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