Tropics and Income in the U.S. States: Further Evidence from Recent Data

Abstract

Following Andrew Kamarck (Tropics and Economic Development, 1976), Ram (Review of Income and Wealth, 1999) studied the relationship between the degree of tropicality and personal income per capita in the U.S. states over the period 1929– 1990. His estimates indicated that the tropicality disadvantage declined from 1929 to 1970, although the estimate for 1990 does not seem significantly different from that for 1970. The decline from 1929 to 1970 implies that the disadvantage due to location near the tropics is not immutable. Decline in the importance of agriculture, improvements in income and technology, and appropriate public policies can mitigate the adverse effects of tropicality on human health, capital formation, agricultural conditions, and overall productivity. Since the last year studied by Ram was 1990, the issue was revisited here to assess the status of the tropicality disadvantage in recent years. Following Ram (1999), the following simple model of a state’s per-capita personal income was estimated: