Indeed, housing costs represent only 19 percent of the income of the typical rural resident compared with 23 percent of the typical urban resident. But it would be a mistake to assume that all of this savings is necessarily translatable into lower overall costs of living. The distances that exist between remote rural areas and more densely populated ones can only be overcome at a cost. Technology can overcome space but only at a price. This often translates into lower levels of both nominal and real income in rural areas.
Remoteness can lead to concentrations of economic distress.
Nearly 23 percent of all non-metropolitan counties had high levels of poverty at the beginning of the l990s compared with 4 percent of metropolitan counties. Rural poverty tends to be less event specific, that is related to death or poor health of the primary earner, and more related to long-established factors such as the limited employent opportunities in the local economy, according to a 1993 study by Calvin Beale. Of course, one of our concerns today in considering the renaissance of rural America is the access to credit as a part of the economic development process. Some of the challenges faced in accessing credit stem from the nature of rural areas. Complicating this is the desire for risk diversification, which often encourages rural banks to invest in government securities or in other opportunities outside the local market, rather than reinvesting more of their funds in the local economy.