Retail employment in rural America: The case of New Mexico

Abstract

A pattern is evident where many geographically large but demographically small states rely on employment in retail to a greater extent than does the nation. To gain insight into this phenomenon, this paper examines the relationship between rurality and retail trade in 31 New Mexico counties during the 2001 to 2013 period. Location quotients were used to capture the relative advantage that retail trade has in a particular county. Retail employment tends to be relatively more important in New Mexico's rural, as opposed to urban, areas, even after accounting for income levels. Ultimately the composition of income helps to explain the anomalous observation in New Mexico. There may be some opportunities to use retail development as a more general economic development strategy in rural areas.