Principal component analysis is used to incorporate the effects of several socioeconomic variables into an index of watershed socioeconomic change. The index is then used as a basis for delineating economic sub‐areas within the Tennessee River basin.

Factor analysis is used to identify and summarize the socioeconomic changes occurring in the Tennessee River Watershed. A general factor analysis program is applied to a set of 25 socioeconomic variables hypothesized to represent many of the dimensions of regional socioeconomic change. The analysis identifies seven factors that underlie and explain socioeconomic change in the Tennessee River Watershed. (KEY TERMS: Tennessee River; factor analysis; socioeconomic change.)