Economic Base of a City

Terminology

 

1. Base/Primary industry:

Ø      Which industry are export oriented and bring money from the other region through export are called base industry.

Ø       As for example-Hollywood produces films and export it in the other countries.

2. Service/Secondary industry:

Ø      Which industry are serves locally and serve the local people in that city deal with local economic activities are called service industry.

Ø      As for example-local school system, super markets, doctors, dentists, real estate agent, and drug stores etc.

 

Economic base of a city

Ø      The ability of a city or region to produce a commodity or service that can bring in money from outside its area is called its economic base.

Ø      It depends on mainly primary industry because it services a huge amount of population.

Ø      The industry that may be primary or secondary brings money from that country. If that condition occurs then that is more economic based

Ø      When this money coming happened, then we can tell that economic base of that city is very stable

Ø      When economic base is stable then the employment pattern is high & there are large sources of alternative income.

Ø      As the money circulation continues then the employment scope is created.

Ø      For example-if we remove rickshaw in a city which are stable, the rickshaw puller can not back to the village, they finding another job.

Ø      In order to survive, a city must export goods and services, so that its residents may purchase goods and services which are not produced locally.

Ø      To illustrate-Hollywood produces films for theatres and television stations across the country. Income from these films permits residents in Hollywood to purchase this.

Ø      A farming city produces farm products in order to generate income with which to buy farm machinery, gasoline, fertilizer, clothing and vacations.

Ø      In turn, the economy of a resort area is kept alive with the money spent there by vacationers.

 

Linkage between Real Estate & Economic Base

The linkage between real estate and economic base are given below:

1. Effect on property value:

Ø      In an undulated area i.e. char area, the value of land is very low because of lack of resources.

Ø      If we find the resources, then the price of land increases

Ø      If we construct any real estate development & any kind of industry then value of land rises.

Ø      Economic base declines with the reduction of industry.

Ø      So the property value and demand vary with the economic base of a city.

2. Vulnerability:

Ø      When any industry will be vulnerable then the economic base of the city will not strong and then the demand of real estate will not enhance.

3. Employment multiplier:

Ø      Employment depends on economic base industry.

Ø      When employment will not generate then we think that economic base of the city is not strong.

Ø      When a base industry creates then creates the opportunity of two intermediate industries.

Ø      These industries are created through the backward linkage.