MICHAEL HICKS: Population decline is no mystery

Michael Hicks, director of the Bureau of Business Research at Ball State University

Michael Hicks, director of the Bureau of Business Research at Ball State University

My job affords me the opportunity to speak often in different communities inside and outside of Indiana. As it turns out, population change always emerges as a prime topic in the question and answer period. But there’s a curious asymmetry to the questions. In growing places, residents and policy makers are eager to learn how to handle the growing demand on public services and goods like schools and roads. In declining places, the questioners seem more puzzled, not understanding why their community is losing people and failing to attract more residents. There’s a lesson here.

It is far more fun to go to growing places and talk about their concerns. These are good problems to have. More importantly, growing places always know why they are growing. In 20 years of giving talks in communities, I’ve never once heard a thriving place fail to understand the cause of their growth.

In contrast, most folks in declining cities and towns seemingly have no idea why they are in decline and their elected officials, economic development professionals and civic leaders are usually just as baffled.

The level of misunderstanding is unfortunate and unnecessary. Residential location decisions are among the most heavily studied of human phenomenon. There is abundant and informative analysis on the issue. For example, Google Scholar, the open source research platform, lists some 4,270 studies on the matter since 1967. In recent years, these studies have focused on very detailed public investment decisions such as the role of a public transportation hub on residential choices, or the influence of toll roads on residential choices. These are important for growing cities.

However, these are distant, esoteric concerns for most declining cities or rural places. The reason research shifted is quite simply because the big questions about decline have long since been answered.

We know for example that school quality alone plays such a robust role in residential location decisions that it accounts for about 30 percent of home value differences. Other amenities, such as public safety, recreation, and road repair all matter as well. For many places, ‘amenity’ is just a code word for not having crummy, potholed streets, unpassable sidewalks and derelict homes.

Of course having availability of employment also matters, but today that mostly just means living near a large city. For thirty years now, we’ve known that the movement of jobs to people is a much stronger pull than people moving to jobs. So, spending money attracting jobs won’t typically grow residential population, though nearby towns with good schools and nice neighborhoods might thank you for the effort on their behalf.

It is understandable that community members aren’t aware of academic studies. After all, they are busy with jobs, raising families, and running businesses. It is common malpractice for civic leaders, elected officials or economic developers to be unaware of this research. But, for high priced consultants, such ignorance is unforgivable.

Sadly, many communities embark on costly studies to better understand why they are losing population. As an economist, I usually just shake my head at this waste. As it turns out, most consulting studies start by asking people why they moved where they did. That would seem a practical approach, but it is not. It turns out you can never really ask the right people that question. Even if you get a few outside perspectives, or locate people who moved elsewhere, these studies necessarily fail because they don’t ask people who would never consider moving to your community. These studies are mostly just a waste of money. A few hours reading online or sitting in a university library would reveal the answer for the price of a few cups of coffee.

Still, the real damage of these studies isn’t the price of the study but the misdirected efforts. These studies almost always seem to always identify a number of easy to remedy, but incorrect barriers to residential population growth. So, a community armed with a new study might spend time building new pocket parks with public art or passing out a $5,000 relocation bonuses to college grads. These things don’t work, but they are easy to do. The actions that ultimately matter like, radically improving local schools, paving streets and fixing sidewalks are hard and costly tasks. As a researcher it pains me to say this, but the troubles that so vex most Indiana communities don’t need more research. They require more honest acceptance and effective action.