RURDS Vol. 17, No. 2, July 2005 EXAMINING THE RELATIONSHIP BETWEEN QUALITY OF LIFE AMENITIES AND ECONOMIC DEVELOPMENT IN THE SOUTHEAST USA Kilungu Nzaku, James O. Bukenya Department of Agribusiness, Alabama Agricultural and Mechanical University, Normal, Alabama, USA This paper contributes to the ongoing discussion about amenity-driven rural development strategies by examining the relationship between quality of life amenities and rural eco- nomic development in the Southeast USA. The premise is that what is true at a national level may provide a partial or misleading picture when we look at particular areas. Additionally, data available at the county level can often provide richer and more precise information than what is found at the national level. The paper estimates spatial regression models using county-level data. For the most part, the results suggest that the differences in quality of life and amenities factors can explain a large portion of the trend in per capita income, employment and population change across counties in the Southeast USA. 1. Introduction The challenges facing rural America are not unique: they are the same challenges found in rural areas elsewhere. For decades rural economies have been dependent on primary industries such as agriculture and other natural resource industries (Isserman, 2000). Although these indus- tries are still important economic sectors, they are generating fewer and fewer jobs. As a result, rural areas are suffering from out-migration of both young and highly skilled workers, leaving an aging population and strained public services. Clearly, farm policies have not addressed all of the needs of rural areas. A crucial implication is that while for a long period agricultural policies have been considered rural policies, an approach that extends far beyond agriculture is required to cure rural ills (Pezzini, 2000). With increasing amounts of off-farm employment, the livelihood of farm families may be more dependent upon what goes on in nearby towns and cities than on their fields. This dependence is as true in Europe as it is in the USA. However, Europe has gone a step further, and has explicitly incorporated rural development objectives into their mainstream agricultural policy 1 (Lamie, 2001), providing a complement to sectoral policy approaches and at the same time offering new trajectories of development for rural areas (Downey and Purvis, 1 In the search for forward-looking and durable policy strategies, building on natural and cultural amenities is emerging as an important area of policy action, one which complements traditional, agriculture-oriented rural policies and places rural policy in the broader territorial development arena in OECD countries (Salzburg, 2003; Bryden, 2003). C  The Applied Regional Science Conference (ARSC) / Blackwell Publishing Asia Pty Ltd. 2005. Published by Blackwell Publishing Asia Pty Ltd.