Pavoni 1

Ludovica Pavoni

Professor Stoian

EC 360-1

22 April 2021

Empirical Paper

An Econometric Study of the Depopulation Rate in

Rural Italy

Abstract

An econometric model of depopulation is applied to the study of rural areas. In particular, eight

Italian regions–that have a population density lower than 150 inhabitants per square kilometer–

are taken into account. In previous studies, the depopulation rate is been explained as a

phenomenon affected by both demographic and socio-economic variables. This paper then

aims to investigate the Depopulation Rate in Italian rural areas, using data collected from Istat

and Eurostat and to see if depopulation is affected by both types of variables. This study finds

that the demographic variables have much more explanatory power than economic ones; in

particular, the Natural Increase Rate and the Total Fertility Rate are significant when talking

about depopulation.
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Table of Contents

Introduction and Motivation ...................................................................................................... 3

Literature Review....................................................................................................................... 4

Data and Methodology............................................................................................................... 5

Introduction of Dummy Variable............................................................................................... 9

Descriptive Statistics.................................................................................................................. 9

Regression Output and Results ................................................................................................ 11

Main Regression Equation and interpretation of coefficients.................................................. 17

Limitations of the model .......................................................................................................... 18

Conclusions .............................................................................................................................. 19

References ................................................................................................................................ 20

Appendix .................................................................................................................................. 20
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Introduction and Motivation

I developed an interest in this field of study while assisting Professor Schwarten with

his research on depopulation in rural areas, especially the rural areas of Abruzzo. The question

of depopulation is quite close to my heart because my grandmother comes from a small village

in the mountains of Abruzzo that, over the years, has consistently been losing its inhabitants.

Working with professor Schwarten enabled me to familiarize myself with the subject matter,

understand how diverse factors bring about depopulation, and appreciate quite how pressing

the issue of depopulation is. Unless action is taken to stem it, depopulation will kill off many

small towns up and down the country. This econometric project will therefore look at the main

determinants/causes of depopulation in rural Italy. Indeed, the study is not limited to Abruzzo,

but it will also take into account other rural areas to see if they depopulate in the same fashion.

Despite the extensive existing literature on the topic, there is no universally accepted way of

identifying or classifying what constitutes a rural area. In very simple words, a rural area is a

scarcely populated zone that is located outside towns and cities. For the purpose of this study,

however, we shall use the definition of the Organization for Economic Co-operation and

Development (OECD)1, which defines as rural any area with fewer than 150 inhabitants per

square kilometer. According to the OECD categorization, eight out of 20 Italian regions qualify

as rural areas, namely Abruzzo, Basilicata, Calabria, Molise, Sardinia, Trentino Alto Adige

(South Tyrol), Umbria and Valle d’Aosta.

Region Population Density (nº inhabitants per km2)

Abruzzo 121

Basilicata 55

1
Dijkstra, L.; Ruiz, V. Refinement of the OECD Regional Typology: Economic Performance of Remote Rural
Regions; Regio, D.G., Ed.; European Commission; OECD: Paris, France, 2010.
 Pavoni 4

Calabria 126

Molise 68

Sardinia 68

Trentino Alto Adige 79

Umbria 104

Valle d’Aosta 38

Literature Review

Quite extensive research has been done on the topic, the most relevant of which for the

purposes of this paper is that done by Ayuda et al.’s. Their study of the Aragon region in Spain

considers the high rate of aging and a low rate of births. The researchers observe that the smaller

a village is, the more it is affected by depopulation and the faster it depopulates. They mention

how out-migration resulted in the phenomenon of negative natural growth, caused by the aging

of the population. The smaller the village, the faster its rate of aging, which, in turn, leads to a

low birth rate. The aging is caused by young people being the first to leave and, in particular,

by the fact more women than men tend to migrate out, which means fewer people are left who

can generate new life.

The study carried out by Rizzo on the depopulation of Sicily, on the other

hand, emphasizes a possible link between depopulation and altitude. He shows how between

1961 and 2011 populations declined sharply in mountainous regions (i.e. regions with an

altitude of 501–1000m), while the percentage of people living at sea level (0–200 m) increased

by around 60%. Meanwhile, Mickovic et al. (2020), examine the depopulation of the

municipality of Niksic, Montenegro. Mickovic’s research suggests that depopulation resulted

from the transformation of the economy in the 1990s, the neglect of agriculture, and the

worsening of living conditions.

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Finally, the literature also suggests that depopulation follows a certain pattern. With

particular regard to rural areas, there seems to be plenty of agreement on the fact that the

territories being abandoned first are those that lie farthest from urbanized centers and have the

worst infrastructure and services. Rural territories are the most backwards and underdeveloped,

so people tend to abandon them, which sets in motion a vicious cycle from which it is difficult

to escape.

Data and Methodology

The data employed in the study are taken from official Italian national resources, the

National Institute of Statistics (ISTAT)2, from Eurostat3, and from a study by Cavalieri and

Guccio4 on health expenditure in Italy. In particular, the main model of the study follows the

eight regions over a period spanning from 2002 to 2019, while the three ‘extra’ models that

have restricted observations will cover data respectively from 2003 to 2017, from 2010 to 2019,

and also the comparison between 2003 and 2019. The variables taken into account can be

divided between strictly demographic and socio-economic. Indeed, part of the study is to

understand whether the depopulation affecting the rural regions of Italy is due to ‘natural

causes’ or if there is a specific problem and reason why people decide to leave.

The demographic variables are the following:

1. Natural Increase Rate – this is calculated as the difference between the live births and

the deaths divided by the resident population of each region on January 1st for each

year. It is expected that if the natural increase rate is negative the depopulation rate will

increase, so the two are negatively related. If the natural increase rate is positive then

the depopulation rate will decrease.

2
https://www.istat.it/it/popolazione-e-famiglie?dati
3
http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_10r_2gdp&lang=en
4
http://www.siepweb.it/siep/images/joomd/1401044478573.pdf
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2. Total Fertility Rate – defined as the number of births per 1,000 women of childbearing

age (between 15 to 49 years old) per year. It is predicted that as the fertility rate

increases, the depopulation rate would decrease because the two variables are

negatively related.

3. Net Domestic Migration – defined as the change in residence from the rest of Italy to

the region. As out-migration is greater than in-migration the depopulation rate will

increase.

4. Net Foreign Migration – defined as the change in residence from the rest of world to

the region. As migration increases so does depopulation. From the data available it is

possible to see that in-migration is greater than out-migration, so net foreign migration

will be negatively related to the depopulation rate.

The socio-economic variables instead are:

1. Regional GDP – it is expected to have a negative relation with the depopulation rate

because as GDP goes up, the richer the region, the less people are expected to leave or

it could also be that as GDP grows people are more willing to move; this depends on

the economic conditions of the rest of Italy.

2. Annual per capita Household Income – it is expected that it will be negatively related

with the depopulation rate because as income increases or even if it stays relatively

uniform people don’t have reason to move away (data available for this variable spans

from 2003 to 2017).

3. Unemployment rate – defined as number of unemployed people as a percentage of the

labor force, seasonally adjusted. As the unemployment rate increases people will be

more willing to leave the region to look for better opportunities, so the two variables

are positively related. However, it is important to mention that since the unemployment
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rate doesn’t have a steady decrease or increase it would also make sense for people to

remain in the region despite the increase of unemployment.

4. Number of crimes – defined as the number of crimes reported by the police forces to

the judicial authorities. It is predicted that as the number of crimes decreases so does

the depopulation rate, the two variables are positively related (data available for this

variable spans from 2010 to 2019).

5. Per Capita Public Expenditure on Healthcare – defined as the amount that each region

spends on health, for both individual and collective services. It is expected that as per

capita public expenditure increases depopulation should decrease because people have

an incentive to remain in the region (data available for this variable is only for 2003

and 2019).

6. University Graduates – defined as the number of people, per region, that have a tertiary

level education. It is expected that as the number of graduates increases so will do the

depopulation rate because people will try to move away in order to have better work

and life conditions.

The following table summarizes the type of variable, the unit of measurement, the expected

effect and also the precise data source.

Table 1: Research Variables

Variable name Unit of measurement Expected effect5 Data Source

Depopulation Rate Percentage points Dependent variable Istat

Natural Increase Rate Percentage points negative Istat

5
It describes the expected impact that each independent variable will have on the dependent one.
 Pavoni 8

Total Fertility Rate # of births per woman negative Istat

Net Domestic Migration # people positive Istat

Net Foreign Migration # people negative Istat

Regional GDP Million euros positive/negative Eurostat

Annual per capita Euros negative Istat

Household Income

Unemployment rate % of labor force positive Istat

Number of Crimes # crimes committed positive Istat

Per capita public Euros positive Cavalieri and

expenditure on Guccio’s

healthcare study

University Graduates # people positive Istat

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Introduction of Dummy Variable

The Quality of Life Index6 is a thematic analysis conducted by an Italian national daily

business newspaper, Il Sole 24 Ore, based on 90 indicators that span from wealth and

consumption, demographics and health, business and work, environment and services, justice

and security, culture and leisure. The analysis takes into account all the Italian cities and rates

them based on their score. With regards to this research, only the top 10 cities will be taken

into account; in particular, if a region has one of its cities in the top 10 of the Index then it takes

value 0 whereas if it’s not in the top 10 it takes value 1. It is expected that the region which

takes value 0 in the given year, and so that has one of its cities in the top 10 of the index, will

experience less depopulation or, better yet, will experience internal migration; therefore, the

regions that have value 0 should depopulate less.

Descriptive Statistics

Table 2 summarizes the variables that will be used in the main econometric model.

Table 2: Summary table

Variables Observations Mean Std. Dev. Min Max

Natural 144 -.0018521 .0020584 -.0058976 .0027784

increase rate

Total Fertility 144 1306.133 169.0166 1000 1646.99

rate

Net domestic 144 -12868.38 8641.738 -31561 -2096

migration

6
https://lab24.ilsole24ore.com/qualita-della-vita-2019/
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Net foreign 144 3281.931 3021.906 27 16782

migration

Regional GDP 144 22249.05 12543.86 3757.05 46483.16

Unemployment 144 10.26937 4.924186 2.554935 23.41532

rate

Table 3 is a correlation matrix that shows the eventual multicollinearity among the

variables under examination. Most of the explanatory variables are not highly correlated with

one another, the only exception are the variables Regional GDP and Net Domestic Migration

that have a negative correlation of -0.86 while for all the other variables the correlation is less

than 0.8.

Table 3: Matrix of correlation

Here are also reported some interesting graphs representing the relationship between

the Depopulation Rate, the Regional GDP, and the Net Domestic Migration.

Figure 1: Regional GDP Figure 2: Net Domestic Migration

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Regression Output and Results

The first analysis that was run was a simple OLS model that included observations from

2002 to 2019, so it was run a regression with the entire main model. Then, taking into account

that the data under analysis is panel data, through the use of the command xtset Region Year

we were able to make understand Stata that the observations belonged to eight different regions

across the same time frame. In Regression (1) it was observed that the dummy variable was not

statistically significant and that the Unemployment Rate wasn’t either. Regression (2) was run

omitting the dummy variable and generating a new variable for unemployment that accounted

for its marginal effect. By doing so the Unemployment became statistically significant at 5%

and the R2 slightly improved. Considering that the variables Regional GDP and Net Domestic

Migration have a negative correlation of -0.86 (see Table 3) we run first another regression (3)

without them and with Unemployment Rate and then (4) with Ln(unemployment); this last

model has all variables statistically significant at 1% but the difference in R2 is minimal. In

Regression (4) Regional GDP, Net Domestic Migration, and Unemployment rate have been

omitted. Finally it was run one extra model (5) only omitting the dummy variable and the

Unemployment Rate because not statistically significant. Table 4 reports the five regressions:

Table 4: Regression Output

(1) (1) (2) (3) (4) (5)

VARIABLES OLS 1 2 3 4 5

Natural Increase Rate 1.293*** 2.527*** 2.179*** 2.269*** 2.016*** 2.510***

(0.146) (0.209) (0.224) (0.161) (0.170) (0.183)

Net Domestic Migration 1.29e-07* 2.63e-07** 2.64e-07** 2.62e-07**

 Pavoni 12

(7.07e-08) (1.22e-07) (1.17e-07) (1.19e-07)

Net Foreign Migration 8.40e-07*** 9.33e-07*** 8.35e-07*** 9.14e-07*** 8.25e-07*** 9.30e-07***

(9.09e-08) (7.69e-08) (7.93e-08) (7.79e-08) (7.91e-08) (7.08e-08)

Regional GDP 4.26e-08 3.43e-07*** 2.79e-07*** 3.40e-07***

(4.17e-08) (1.03e-07) (9.95e-08) (9.82e-08)

Unemployment rate -0.000569*** 9.55e-06 -6.27e-05

(7.77e-05) (8.07e-05) (8.02e-05)

Total Fertility Rateper -1.18e-05*** -1.96e- -1.66e- -1.65e- -1.43e- -1.95e-

05*** 05*** 05*** 05*** 05***
(1.99e-06) (3.00e-06) (3.11e-06) (2.44e-06) (2.48e-06) (2.93e-06)

Quality of Life Index -0.00256*** -0.000188

(0.000765) (0.00107)

Ln(unemployment) -0.00202** -0.00248***

(0.000818) (0.000811)

Constant 0.0238*** 0.0234*** 0.0250*** 0.0238*** 0.0255*** 0.0233***

(0.00303) (0.00357) (0.00323) (0.00340) (0.00331) (0.00322)

Observations 144 144 144 144 144 144

R-squared 0.825 0.836 0.844 0.821 0.832 0.836

Number of Region 8 8 8 8 8
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Among the five regressions, Regression (5) is the better model because all the variables

are statistically significant and we omitted Unemployment Rate that was not contributing to

the analysis. This model has a slightly lower R2 but for the purposes of this study the result is

still pretty good. We tested for heteroskedasticity (Figure 3 in Appendix) and corrected for it

(Figure 4 in Appendix) but the difference with the model is once again very little so we prefer

to continue using Regression (5).

We then ran the regression for the first restricted model, the one with observations from

2003 to 2017 with the added variables Number of Graduates and Annual per capita Household

Income. The first regression (1) run included all the explanatory variables and it was found that

Net Domestic Migration, Unemployment Rate, the Number of University Graduates and the

Annual per capita Household Income were all not statistically significant. We tried generating

a new variable, the natural logarithm of the unemployment rate, but despite an improved R2

both the new variables as well as the dummy variable were not statistically significant, as seen

in Regression (2). We then removed the dummy variable, having checked for multicollinearity

through a matrix of correlation (table 5 in Appendix), also Regional GDP and Net Domestic

Migration were taken out of the Regression (3). Since University Graduates and Annual

Average Households Income were not significant we run a fourth model (Regression (4)) where

the only variables that were statistically significant were the demographic ones suggesting the

idea that depopulation in rural Italy is mainly driven by the increase in deaths and the decrease

in births.

Table 6: Regression Output

(1) (2) (3) (4)

VARIABLES 1 2 3 4

Natural Increase Rate 2.397*** 1.967*** 1.865*** 1.877***

(0.262) (0.281) (0.263) (0.235)
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Net Domestic Migration 2.41e-07* 2.29e-07

(1.44e-07) (1.39e-07)
Net Foreign Migration 9.98e-07*** 8.97e-07*** 8.80e-07*** 8.83e-07***
(8.37e-08) (8.75e-08) (8.65e-08) (8.55e-08)
Regional GDP 4.60e-07** 4.39e-07**
(1.77e-07) (1.73e-07)
Unemployment Rate 2.85e-05
(9.45e-05)
Total Fertility Rate -1.94e-05*** -1.70e-05*** -1.61e-05*** -1.63e-05***
(3.71e-06) (3.80e-06) (3.39e-06) (2.85e-06)
University Graduates -8.96e-08 -1.21e-07 1.23e-07
(2.41e-07) (2.37e-07) (2.15e-07)
Annual Average Households Income -1.77e-07 -2.11e-07* -4.78e-08
(1.26e-07) (1.24e-07) (1.07e-07)
Quality of Life Index -2.91e-05 -0.000239
(0.00109) (0.00107)
Ln(unemployment) -0.00206** -0.00214** -0.00213**
(0.000981) (0.000997) (0.000964)
Constant 0.0255*** 0.0286*** 0.0278*** 0.0270***
(0.00453) (0.00442) (0.00420) (0.00390)

Observations 120 120 120 120

R-squared 0.826 0.833 0.821 0.820
Number of Region 8 8 8 8

The second restricted model is the one that takes into account the Per Capita Public

Expenditure on Healthcare between the year 2003 and 2019. Once again, the first model that

was run was the one comprising all the explanatory variables, as shown in Table 7 in

Regression (1). All the variables result not statistically significant. It was tested for

multicollinearity (table 8 in Appendix) and none of the variables, except for Regional GDP and

Net Domestic Migration, resulted correlated by -0.83. A second regression (2) was run omitting

the dummy variable and the two previously mentioned variables, but all the variables were still
 Pavoni 15

not significant. Also in this case Ln(unemployment) was generated but the variables continued

to be non-significant (3). It is interesting to comment on the fact that Per Capita Public

Expenditure on Healthcare has no explanatory power, but when gathering the data it was

believed the opposite. Despite having Italy a free Healthcare system the per capita increase on

Expenditures on Healthcare should be a good incentive to remain in the region and not move

away. If we take Abruzzo’s case, we can see that Per Capita Public Expenditure on Healthcare

in 16 years has increased by 36% but depopulation still occurred.

Table 7: Regression Output

(1) (2) (3)

VARIABLES 1 2 3

Natural Increase Rate 4.362 1.411 0.146

(1.627) (5.016) (3.855)
Net Domestic Migration 1.14e-07
(4.05e-07)
Net Foreign Migration 1.63e-06 2.86e-07 3.09e-07
(3.46e-07) (7.16e-07) (6.17e-07)
Regional GDP 1.11e-06
(2.18e-07)
Unemployment rate -0.00122 -0.00135
(0.000429) (0.00135)
TotalFertilityRateper1000 -6.77e-05 -2.18e-05 6.41e-07
(1.30e-05) (3.12e-05) (2.44e-05)
Per capita public expenditure 4.09e-06 -7.08e-06 -1.18e-05
(8.23e-06) (2.63e-05) (2.07e-05)
Quality of Life Index -

Ln(unemployment) -0.0113
(0.00845)
Constant 0.0728 0.0559 0.0438
(0.0123) (0.0321) (0.0260)

Observations 16 16 16
R-squared 0.998 0.932 0.943
Number of Region 8 8 8

The third restricted model was then analyzed. This model comprehended data from

2010 to 2019 and the new variable added was Number of Crimes. A regression (1) with all the
 Pavoni 16

variables was run once again. Many of the variables were not statistically significant; we run a

second (2) model taking out the dummy variable, that given the previous tests was never really

helpful in understanding the depopulation rate, and the Net Domestic Migration. The second

model had three significant variables–Natural Increase Rate, Net Foreign Migration and

Regional GDP–while all the others weren’t significant at 1%. A third model (3) was run after

having checked for multicollinearity (table 8 in appendix) and removed Regional GDP because

showed a correlation of 0.81 with Number of Crimes and of -0.85 with Net Domestic

Migration. The three models are represented in Table 9.

Table 9: Regression Output

(1) (2) (3)

VARIABLES 1 2 3

Natural Increase Rate 2.371*** 2.370*** 2.400***

(0.318) (0.312) (0.327)
Net Domestic Migration 4.43e-08 4.97e-08
(1.32e-07) (1.32e-07)
Net Foreign Migration 8.30e-07*** 8.36e-07*** 7.69e-07***
(1.68e-07) (1.59e-07) (1.71e-07)
Regional GDP 5.39e-07*** 5.27e-07*** 4.87e-07**
(1.92e-07) (1.89e-07) (1.97e-07)
Unemployment rate 0.000220** 0.000219**
(0.000104) (0.000102)
Total Fertility Rate -9.13e-06 -9.48e-06* -1.01e-05*
(5.68e-06) (5.59e-06) (5.76e-06)
Number of Crimes 8.35e-08 8.57e-08 7.26e-08
(5.57e-08) (5.51e-08) (5.76e-08)
Quality of Life Index 0.00100
(0.00108)
Ln(unemployment) 0.00174
(0.00128)
Constant -0.00399 -0.00321 -0.00167
(0.00869) (0.00853) (0.00948)

Observations 80 80 80
R-squared 0.810 0.807 0.800
Number of Region 8 8 8
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After having run several regressions, we can say that the original model, the one with

the most observations is the most efficient in explaining depopulation rates. In particular,

Regression (5) we run can be considered the best in order to explain depopulation.

Main Regression Equation and interpretation of coefficients

The main regression equation is as follows:

.
𝐷𝑒𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝚤𝑜𝑛 𝑟𝑎𝑡𝑒 = 𝛽! + 𝛽" ∗ 𝑛𝑎𝑡𝑢𝑟𝑎𝑙 𝑖𝑛𝑐𝑟𝑒𝑎𝑠𝑒 𝑟𝑎𝑡𝑒 + 𝛽# ∗ 𝑛𝑒𝑡 𝑑𝑜𝑚𝑒𝑠𝑡𝑖𝑐 𝑚𝑖𝑔𝑟𝑎𝑡𝑖𝑜𝑛

+ 𝛽$ ∗ 𝑛𝑒𝑡 𝑓𝑜𝑟𝑒𝑖𝑔𝑛 𝑚𝑖𝑔𝑟𝑎𝑡𝑖𝑜𝑛 + 𝛽% ∗ 𝑟𝑒𝑔𝑖𝑜𝑛𝑎𝑙 𝐺𝐷𝑃 + 𝛽&

∗ 𝑡𝑜𝑡𝑎𝑙 𝑓𝑒𝑟𝑡𝑖𝑙𝑖𝑡𝑦 𝑟𝑎𝑡𝑒

The regression with the corresponding values is:

.
𝐷𝑒𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝚤𝑜𝑛 𝑟𝑎𝑡𝑒 = 0.023 + 2.51 ∗ 𝑛𝑎𝑡𝑢𝑟𝑎𝑙 𝑖𝑛𝑐𝑟𝑒𝑎𝑠𝑒 𝑟𝑎𝑡𝑒 + 2.62 ∗ 10'(

∗ 𝑛𝑒𝑡 𝑑𝑜𝑚𝑒𝑠𝑡𝑖𝑐 𝑚𝑖𝑔𝑟𝑎𝑡𝑖𝑜𝑛 + 9.30 ∗ 10'( ∗ 𝑛𝑒𝑡 𝑓𝑜𝑟𝑒𝑖𝑔𝑛 𝑚𝑖𝑔𝑟𝑎𝑡𝑖𝑜𝑛 + 3.40

∗ 10'( ∗ 𝑟𝑒𝑔𝑖𝑜𝑛𝑎𝑙 𝐺𝐷𝑃 − 0.000019 ∗ 𝑡𝑜𝑡𝑎𝑙 𝑓𝑒𝑟𝑡𝑖𝑙𝑖𝑡𝑦 𝑟𝑎𝑡𝑒

Table 10:final model

(5)
VARIABLES 5

Natural Increase Rate 2.510***

(0.183)
Net Domestic Migration 2.62e-07**
(1.19e-07)
Net Foreign Migration 9.30e-07***
(7.08e-08)
Regional GDP 3.40e-07***
(9.82e-08)
Unemployment rate

Total Fertility Rateper -1.95e-05***

(2.93e-06)
Quality of Life Index

Ln(unemployment)
 Pavoni 18

Constant 0.0233***
(0.00322)

Observations 144
R-squared 0.836
Number of Region 8

Interpretation of the regression model:

• Ceteris paribus, a percentage point increase in the Natural Increase Rate determines an

increase in Depopulation Rate, on average, of 2.51 percentage points.

• Ceteris paribus, every additional person that migrates within Italy increases, on average,

the depopulation rate by 2.64 ∗ 10'( percentage points.

• Ceteris paribus, every additional person that migrates outside of Italy increases, on

average, by 9.30 ∗ 10'( percentage points the depopulation rate.

• Ceteris paribus, every additional increase in Regional GDP (in million of euros)

increases by 3.40 ∗ 10'( percentage points the depopulation rate, on average. The

regression showed that Regional GDP and depopulation rate are positively related, this

could be explained by the fact that GDP increases all over Italy thus people would be

more willing to move to a different region, where the economic growth is more

significant.

• Ceteris paribus, 1 more birth per woman, on average, decreases the depopulation rate

by 0.000019 percentage points. This is quite self-explanatory because as more people

are born, the easier it is to offset the phenomena of depopulation.

Limitations of the model

This study could be expanded and improved if more time was available for the

collection of data. Indeed, further research should be done on the topic because some
 Pavoni 19

explanatory variables included did not cover the chosen timeframe of the analysis, therefore,

the various results from the different regressions could not be compared. Moreover, more

explanatory variables could be added in order to have a more comprehensive understanding of

the subject matter. In particular, the model presented in the analysis could be improved by

including a more detailed analysis of the territory. It would be interesting to see how the

population density changes within each region; in particular, how being closer to big cities

changes the depopulation rates. Going more in depth, it would be interesting to see if it possible

to categorize the rural regions in additional subgroups based on population density and also on

distance from bigger urbanized centers. The rural areas could be divided as predominantly

rural, predominantly rural close to cities and predominantly rural remote. Or the rural areas

could be subdivided based on economic performance because not all rural areas are the same;

some are exploiting their natural resources as promotors of economic growth and tourism. As

briefly shown in Rizzo’s study there is quite a clear difference between the rural areas which

have undergone a restructuring of their internal equilibrium and those areas that are

characterized by a long-standing trend of depopulation.

Conclusions

The paper presented an understanding of depopulation rates in rural Italy through a

panel data analysis. It was found that demographic variables are much more significant in

explaining depopulation while economic and socio-economic variables influence less the

depopulation rates. The Natural Increase Rate determines a substantial explanatory power for

depopulation rates even though it doesn’t follow its predicted outcome. Migration also plays

an important role in explaining depopulation because as the more people are out-migrants the

more depopulation increases. The Total Fertility Rate however has a negative impact on

depopulation because if more people are born, so if there is an increase in births, then it will be
 Pavoni 20

easier to compensate for depopulation. Despite the small weight it has and the fact that it wasn’t

included in the final regression, it is quite interesting to see how unemployment was not

significant while it was predicted that it would have had good explanatory power. It was

assumed that with the worsening of the labor market people would be more willing to leave,

but this study allows to understand that even if unemployment increases depopulation might

decrease because it is necessary to see the neighboring regions or countries’ unemployment to

decide whether to move or not. Similarly, the impact of Regional GDP is interesting: as GDP

grew, depopulation would have to decrease while, despite having a small coefficient, GDP

determines an increase in depopulation. This might be explained by the fact that as people feel

more economically secure they could migrate to other well-off regions.

References

Ayuda, María-Isabel, et al. “Rural Depopulation and the Migration Turnaround in

Mediterranean Western Europe: A Case Study of Aragon.” Journal of Rural and

Community Development, 2008, vol. 3, no.1.

Cavalieri, Martina and Calogero Guccio. “Health Expenditure in Italy: a Regional Analysis of

the Public-Private Mix.” Società Italiana di Economia Pubblica, 2006, p.8.

Mickovic, Biljana, et al. “Contribution to the Analysis of Depopulation in Rural Areas of the

Balkans: Case Study of the Municipality of Niksic, Montenegro.” Sustainability 12,

no. 8: 3328, 2020.

Rizzo, Agatino. “Declining, Transition and Slow Rural Territories in Southern Italy

Characterizing the Intra-Rural Divides.” European Planning Studies, 2016, vol. 24,

no. 2, Feb. 2016, pp. 231-253

Appendix

Figure 3: test for heteroskedasticity

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Figure 4: correction for heteroskedasticity

Table 5: Matrix of correlation

Table 7: Matrix of correlation

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Table 8: Matrix of correlation