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THE OPTIMAL CONVERGENCE OF REGIONAL INCOMES *
Author(s) -
Persky Joseph J.,
Tam MoYin S.
Publication year - 1985
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1985.tb00304.x
Subject(s) - convergence (economics) , economics , equity (law) , inequality , welfare , econometrics , index (typography) , income distribution , point (geometry) , economic inequality , distribution (mathematics) , public economics , mathematics , macroeconomics , computer science , political science , market economy , mathematical analysis , geometry , world wide web , law
ABSTRACT For many policy considerations it is assumed that the convergence of regional mean income will improve national equity by reducing overall inequality. The literature on decomposability of social welfare functions implies that this assumption is unwarranted. This paper develops a notion of optimal regional convergence. In general, the point of optimal convergence depends on the shapes of the regional income distributions, the inequality index used, and the rule for distributing interregional transfers. These concepts are illustrated with data on the regional income distributions of the Southern and Northern United States.