Wool and the relative resilience of Western Australian Wheatbelt economies

Abstract

<p>This article seeks to examine the path dependence and relative resilience of rural economies by focusing on the dynamics of the wool industry, a former mainstay of the economic base of many, if not most, Australian rural economies throughout most of the twentieth century. Based on a case study of the Western Australian Wheatbelt, a region in which broadacre cropping and Merino sheep grazing formed a cohesive farming enterprise type for many decades, we employ dynamic econometric models to test the relative resilience of the wool sector for four of the region’s constituent local government areas (LGAs) from just prior to the onset of the Second World War to the closing years of the twentieth century. The testing reveals evidence of both path dependence in the general model specification and a tendency for the four LGAs as a group to return to their long-run developmental trajectories following a “shock.” However, divergence across the performance of the four LGAs suggests the persistence of historical and ecological gradients that require further investigation.</p>