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Article

Abstract

In a 2016 Show-Me Institute essay, Michael Podgursky and Nick Pretnar demonstrated the proportional importance to the state economy of Missouri’s two dominant metro areas.1 As they report, the St. Louis and Kansas City metro areas together account for well over half of Missouri’s economic output (64 percent of gross state product in 2013), indicating that the aggregate performance of the state economy is largely determined by the performance of the two metro areas’ economies. In this essay I take this idea a step further and examine whether there is more than simply a proportional relationship.

Specifically, I look at whether the level of growth in outstate Missouri (all areas not included in the two metro areas) can be predicted by the levels of growth in the metro areas. Because predictability would be consistent with a causal link between the economies of the metro areas and outstate Missouri, economic events in the metro areas might be of greater interest to the rest of the state than is usually thought. In terms of policy, causality would, among other things, strengthen arguments that the state as a whole (and thus state government) has an interest in local-level economic policymaking within the St. Louis and Kansas City metro areas.

The motivation for pursuing such links is the long-held view among researchers that the economic pull of cities extends beyond their metro areas into megaregions, usually centered around traditional metro areas. Recent research has extended the study of metro areas to account for interconnectedness: for example, St. Louis is connected to Wentzville, and Wentzville is connected to Columbia, so St. Louis and Columbia are interconnected.2 Such research suggests that what happens in St. Louis and Kansas City doesn’t stay in St. Louis and Kansas City. This essay provides some evidence of the importance of this interconnectedness.

Publication Date

4-2023

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