Abstract
The spatial variation of the value-added per hour worked across Italian NUTS3 areas is decomposed into a productivity effect and an occupational composition effect. By analysing patterns of spatial association of those different (but related) economic variables and by using different interaction schemes between locations, it is possible to identify local differences in economic outcomes and to draw some conclusions about their determinants. Geographical proximity is measured by travel time. The results signal the presence of intra-regional differences as significant as those between the major regions. Such differences may differ in terms of their underlying causes, even within regions.
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