From 1979 through 1984 the economic bases of rural Oregon counties have undergone structural change. Nonwage income, especially transfer payments, has played an important role in these changes. Demographic changes in rural counties have contributed to the growth in unearned income. The economic structure of rural Oregon counties was estimated by applying indirect export analysis techniques to secondary data. The results of the structural analysis provided the data for the econometric analysis. A conceptual model of regional growth was developed that incorporated community characteristics such as the size of the market (population) and market distance (location and commuting activity) from central place theory. This conceptual model was made operational through several econometric models which regressed basic income and community characteristics on residentiary incomes. Data limitations prevented extensive testing of the econometric models. Some bias, which affected the values of the residentiary sectors, was perceived in the estimation of exports. Two methodological improvements were attained. Firstly, the economic base of each county was estimated with sectoral groupings and data disaggregation that were better suited to the analytical techniques than is commonly applied. Secondly, a regional growth model was develped that combined basic income arguments with regional location and population arguments. The growth of expenditures by transfer payments recipients, both as a type of basic income expenditure and as a representative of retiree consumption, helped to account for the growth of residentiary income in rural counties during the early 1980's. Due to the steady growth of transfer payments, the growth of the retiree population and the decline in export earnings, policy makers should specifically consider the changing number of retirees when formulating regional development strategies. / Graduation date: 1988