Income Inequality Convergence among Iran’s Provinces: Finding New Evidence Using Parametric and Nonparametric Approaches

Author

Department of Economics, Qazvin Branch, Islamic Azad University, Qazvin, Iran.

Abstract

The income inequality convergence is the second part of neoclassical growth theory. The hypothesis predicts that income inequality among countries/provinces/regions disappear over the time. In this paper, the income inequality convergence is investigated among Iran’s provinces over the period 2000–2015. For this purpose, we employed parametric approach (GMM-system estimator of dynamic panel data model), and non-parametric approach (distribution dynamics). The distribution dynamics approach indicated that the Gini index of Iran’s provinces were converged toward unique steady stead about 0.3, and the results of absolute β convergence hypothesis indicated that the Gini index of Iran’s provinces moved halfway to the steady state in about 17 years after 2015.

Keywords