Thursday, May 20, 2010

Small Town Attraction

When I think about small town America, I don't envision extinction. Some places can and will grow. Just how exceptional these thriving communities will be remains to be seen. Innovation might turnaround the fortunes of your hometown:

Rabbis are not uncommon in larger cities of the south. Atlanta, Nashville, Memphis and the Research Triangle area of North Carolina all have sizeable Jewish populations, even as those in smaller towns are ageing and dwindling. The community in Dothan, Alabama may have hit on a solution: they are offering Jewish families with children up to $50,000 to move there. That may not only help revive a century-old community but, if even more Jews were drawn south, it might help Mr Klaven with one of his most pressing concerns. He loves the South and hopes to remain in this post for a while. But, he says, finding a nice Jewish girl in Mississippi isn’t easy.

Whether it's attraction or retention, there are a bunch of incentive programs across the United States that hope to influence migration. These policies don't work all that well. Why not?

Via Free Exchange, identity economics might offer an explanation:

In the civilian world, too, the most important determinant of whether an organization functions well is not the monetary incentive system, as standard economic models would imply, but whether its workers identify with the organization and with their job within it. If they do not, they will seek to game the incentive system, rather than to meet the organization’s goals.

There's quite a bit of migration that seems irrational without considering identity factors. Moving to the suburbs might be a poor economic decision, but homophily makes it the most attractive option. Few people will venture into terra incognita even if you offer them $50,000.

A few years ago, the Economist published the costs to be smuggled into certain places within the United States. It was quite a bit cheaper to be dropped off in Nogales, Arizona than Phoenix if coming from Mexico. China to New York City was easily the most expensive option. Wouldn't one illegal entry into the United States be as good as another?

The market suggests otherwise. If the destination on your mental map is common among other potential emigrants, then you are going to pay dearly for that preference. The geographic arbitrage opportunities don't matter. You'll find a way to come up with the money.

Last summer, I met an individual who had moved from California to rural South Dakota. She was charged with setting up an office in the region for her employer, but the field of potential communities to locate was pretty open.

So, how did she choose? Part of the answer rested with a blog she discovered; she felt the blog helped her connect with people of similar interests and values in one community without having to move there first. But it also provided a more authentic view of the community than possible through a traditional community-based website. This isn’t a knock on traditional community-based websites. It simply acknowledges that even at their best, websites only tell part of the story. And they don’t usually help you meet people.

Blogging influences migration. Returning to Dothan (Alabama), someone posting about accepting the $50,000 offer and the relocation experience could do wonders for that town. Of course, it could also backfire. Such are the risks of social media. Nothing ventured, nothing gained.

I understand blogging as the most efficient knowledge market. I'll go a bit further. It's the only social media platform that matters. Bloggers drive the conversation like no one else can. Just ask Sarah Palin.

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