Abstract
This paper investigates the inter-county variation of per capita personal income within US states from 1969 to 2006. It is a test of the growth pole cycles theory of spatial-temporal economic development that combines the theory of growth poles with the theory of long wave cycles. Standard OLS regression analysis is performed using data from the Bureau of Economic. Results indicate that regional income variation increased for the majority of states with no indication of a decrease or convergence of regional incomes.
Highlights
Income inequality is a dynamic that has long been used as an indicator of economic development and overall societal well-being
In that per capital personal income is increasing during the study period of 1969 to 2006, these results indicate that regional income inequality is increasing and diverging, moving up the first leg of a Kuznets inverted-U, presumably in segment III of Figure 1
Results of the OLS regression estimate of Equation (2) for the 50 states overwhelmingly supports the hypothesis that regional income inequality increases within states over the time period of analysis
Summary
Income inequality is a dynamic that has long been used as an indicator of economic development and overall societal well-being. A working presumption in most analyses and policy considerations is that a more equal distribution of income is beneficial; a goal worth pursuing. Economic literature is replete with studies into the causes and consequences of rising and falling income inequality; that is, income divergence and convergence. Of particular interest to the study of regional economics and economic development is spatial inequality of income, or the variation of regional incomes. Perhaps the seminal study in this area, laying the foundation for decades of research that followed, is Williamson [1]. This study identifies a convergence of regional incomes in the United States, at the state level, supporting the noted Kuznets inverted-U hypothesis of economic development (Kuznets, [2])
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