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Do Air Conditioners Explain the Rise of the South?

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Paul Krugman says yes and yes:
The rise of the US sunbelt can be understood largely as a response to the emergence of widespread air conditioning, which made places that are warm in the winter attractive despite humid, muggy summers. It’s a gradual, long-drawn-out response, because location decisions have a lot of inertia[.]

And this:
[T]here’s a real demographic turning point for the South circa 1960, as a steadily falling share of the total US population shifts to a sustained rise…this turning point coincides with the coming of widespread home air conditioning. So when you ask why Sunbelt states have in general grown faster than those in the Northeasy, don’t credit Art Laffer; credit Willis Carrier.

This is an intuitive explanation, but it is incomplete and cannot explain recent net migration patterns within the United States. On the first point it is important to note that the South’s economy actually began to accelerate in the 1930s and 1940s.

 

This takeoff is one of the great stories from 20th century U.S. economic history. From the close of the Civil War up through World War II, the South’s economy had been relatively undeveloped and isolated from the rest of the country. This eighty-year period of economic backwardness in the South stood in stark contrast to the economic gains elsewhere in the country that made the United States the leading industrial power of the world by the early 20th century. Something radically changed, though, in the 1930s and 1940s that broke the South free from its poverty trap. From this period on, the South began modernizing and by 1980 it had converged with the rest of the U.S. economy. But why the sudden break in the 1930-1940 period? 
There have been a number of attempts to explain this sudden change in the trajectory of the South. Gavin Wright (1997) attributes it to the opening up of labor markets, Connolly (2004) looks to improved human capital formation, Cobb (1982) points to industrial policy, Beasley et al. (2005) finger increased political competition, Bleakley (2007) sees hookworm eradication as important,  Glaeser and Tobio (2008) look to housing regulations, and Bateman et al (2009) see the large public capital investments in the South during the 1930s and 1940s as facilitating a ‘Big Push’ for the region. The takeaway is that there were probably many factors that supported the rise of the South, not just air conditioning.

The other problem with looking to air conditioning as the reason for the rise of the South is that there are recent net migration patterns that show movement into the warm South from other warm regions. For example, this Census Bureau figure shows for the 1995-2000 period net migration out of California often went into other warm states, including many in the South. 

To further illustrate this point, he next three figures focus in on three big counties in Texas: Harris Country (Houston), Dallas County (Dallas), and Travis Country (Austin). They all show for the years 2008-2012 net inflows coming from southern California where it is also warm (source): 

So air conditioning cannot be an important story over this time. It may have contributed, along with the other factors listed above, to the the initial takeoff of the American South, but not so in recent decades. The rise of the South is a far more complicated story.


Source: http://macromarketmusings.blogspot.com/2015/03/do-air-conditioners-explain-rise-of.html



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