Paul Plummer

Boomtowns, Resource Dependence and Socio-economic Well-being

Abstract The issue of socio-economic well-being in resource-dependent communities has been one of ongoing interest for geographers, rural sociologists and economists. While much research focuses on the impacts of industry downturn and closure on well-being, this paper is focused on the implications of large-scale resource development and rapid growth in boomtowns. In contrast to a long tradition of research in other parts of the developed world, relatively few studies explicitly examine the relationship between resource reliance and socio-economic well-being in Australias resource-dependent regions. Within the context of a nationwide resources boom, this paper presents an analysis of resource dependence and socio-economic well-being in the remote mining towns of Kalgoorlie-Boulder, Port Hedland and Karratha-Dampier in Western Australia. The paper looks into the anatomy of the resources boom in terms of local demographic and economic change, and examines a range of socio-economic indicators, such as income, cost of living, housing affordability, welfare receipts and unemployment. The paper then contemplates the implications of rapid growth in Western Australias resource boomtowns and the associated challenges for regional governance.

Capitalism beyond Harmonious Equilibrium: Mathematics as If Human Agency Mattered

Narrating a world of flux entails moving away from equilibrium-oriented thinking toward considerations of emergence, uncertain futures, and unintended consequences. This is not the exclusive domain of the qualitative theory construction and analysis that has dominated such thinking in sociospatial theory: it is also involved in mathematical theory construction. It requires a relational approach to mathematical theory, however, that moves beyond unidirectional claims of cause and effect, avoids deterministic and teleological thinking, and recognizes the incompleteness and openness of any such theoretical construction. These arguments are explored through an example that employs mathematical techniques often associated with complexity theory to examine unevenly shifting economic landscapes where the best guesses of capitalist entrepreneurs are interrelated with the emergent multiregional economy in which capitalists participate. This highlights the unexpectedly heightened dynamical importance of regions in a globally connected world; how cherished theoretical principles become renegotiated, as relationality leads to emergence; and that there is space for human agency, through modeling praxis appropriate to ‘incomplete systems’. We open modest cracks in the supposed wall between quantitative and qualitative approaches, oriented toward a methodological reinterpretation of what employing mathematical arguments could mean within larger, postpositivist theoretical projects in critical human geography.

Modeling Spatial Price Competition: Marxian versus Neoclassical Approaches

Regional political economy is an approach to economic geography that can transcend the current dualism of a new neoclassical economic geography and a new cultural economic geography. We apply this approach to modeling the pricing strategies of firms competing in a geographically extensive market, critically assessing the validity of neoclassical theoretical claims about firm behavior. The neoclassical claim that firms should maximize total profits when setting prices is inconsistent with empirical evidence that, in practice, firms utilize the Marxian goal of maximizing the rate of profit. Regional political economy can explain why firms would choose to employ rate-of-profit pricing as a competitive strategy. In disequilibrium, uncertainty and sunk costs force firms into pricing strategies that, plausibly, should be evaluated on rate-of-profit grounds. Even in equilibrium, where neoclassical theory is presumed to be valid, economically rational firms in spatial markets should prefer the economic goal of ma...

Spatial Pricing in Interdependent Markets: Testing Assumptions and Modeling Price Variation. A Case Study of Gasoline Retailing in St Cloud, Minnesota

In this paper we present an empirical evaluation of assumptions about consumer purchasing behavior for gasoline. Previous research has developed a theoretical model of spatial pricing in oligopolistically competitive markets in which it is hypothesized that retail prices vary because of both consumer price sensitivity and the choice sets available to consumers as well as awareness of prices at competing locations. With the use of household survey data collected from St Cloud, Minnesota we evaluate the plausibility of these assumptions, finding evidence to support the consumer purchasing behavior assumed in the theoretical model. By means of a spatial time series of gasoline price data for the same metropolitan area, we develop an empirical model of spatial price variation that incorporates some of the hypotheses of the original model. The results suggest support for the proposition that spatial price variations depend on the service characteristics of individual retailers and the accessibility or locational advantage of individual gasoline stations within the spatial configuration of the urban market. There also is empirical support for the conjecture that those sites which are more accessible, have larger choice sets, and charge lower prices tend to be those which attract the most sales from other retailers.

Spatial Competition Amongst Hierarchically Organized Corporations: Prices, Profits, and Shipment Patterns

In recent years, there have been computational and theoretical advances in the analysis both of the equilibrium and of the disequilibrium properties of pricing models in which spatial markets are dominated by autonomous firms engaged in oligopolistic competition. In this paper I develop an approach to the modeling of spatial pricing that transcends the unrealistic institutional simplification that firms are autonomous and independent of corporate organizational structures. Specifically, I hypothesize that competition between corporations takes place at two spatial scales. At the intraurban scale, corporations compete for market share through their franchise sites, where market share is contingent upon the nature and degree of competition between franchises, the spatial structure of the urban market, and the costs of production to the franchise. At the intraurban scale, competition is defined in terms of the strategies of the individual corporations as they adjust their delivered prices to urban markets in response to changes in their costs of production and distribution, the interurban transportation network, and the achieved market share in each urban market. I demonstrate that, for a general corporate objective, there exists at least one spatial price equilibrium and that the stability conditions of this model are identical for two price-setting scenarios: a partial adjustment model and a Bertrand game. For the specific corporate objective of total-profit maximization, I examine the qualitative properties of the hierarchical model.

Competitive Dynamics in Hierarchically Organized Markets: Spatial Duopoly and Demand Asymmetries

In recent years, there has been considerable interest in the impact of corporate organizational structure on the configuration of prices, outputs, and profits in spatially extensive markets. In previous research I examined the general and analytical conditions defining both the existence and stability of an equilibrium in hierarchically organized spatial markets dominated by oligopolistic corporations that distribute a commodity directly to consumers through their retail franchises. Here I examine the disequilibrium dynamics resulting from this model. A bilevel decisionmaking process is hypothesized in which corporations vary their delivered prices in response to changes in urban market demand and in which franchises vary their retail prices in response both to changes in the cost of the commodity from their parent corporation and to the pricing strategies pursued by their competitors. The complexity of interactions operating between the two levels of the model and the presence of asymmetrical demand conditions facing duopolistic corporations suggests that it is unlikely that an overall spatial price equilibrium can actually be reached by such disequilibrium price-adjustment strategies.

Profit‐Rate Maximization in Interdependent Markets: A Research Note

In the theory of the firm it is conventional to regard firms as (total)profit-maximizing institutions. In this paper it is shown that the interdependence among firms that is characteristic of monopolistic competition makes it plausible for them also to choose to maximize the rate of profit on capital advanced. For a homogeneous product with inelastic total demand, such as gasoline retailing, firms acting as rational agents, facing fixed costs in a homogeneous spatial market, and choosing to set prices under rate of profit-maximization can achieve higher total profits than firms operating under total profit-maximizing objectives.