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This paper is a revised version of one presented to the 1985 Regional Science Conference, 2–4 December, Adelaide University, Adelaide, SA. The paper was prepared whilst the author was employed as Senior Lecturer in Economics at the University of New England and does not necessarily represent the views of his current employer. Financial assistance from the University of New England is gratefully acknowledged. Secretarial assistance received from that University and from Monash University where the author was a visitor is also acknowledged. The author has benefited from comments made by participants in a seminar given to the Department of Geography, UNE, and from discussions with Ross Parish, Bob Officer, Tony Sorenson and John Pullen. Any errors are the author's sole responsibility.