Regional convergence in outputs and incomes in Italy and the U.S

One of the key topics of international and inter-regional research in the past decade has been that of convergence or divergence in real outputs and incomes across countries and regions within individual countries. Most empirical studies, however, tend to focus on only one measure of economic performance (per capita GDP or value added per capita or per capita incomes) rather than multiple measures of performance and fail to conduct comparative studies of multiple measures across countries. Do nations differ in the comparative degree of inequality across alternative measures of economic performance? This research paper attempts to address these past shortcomings by focusing on identifying, analyzing and comparing the degree of inequality and the degree of convergence or divergence overtime in three important economic performance measures - per capita real outputs, family and household incomes, and per capita incomes with families - in regions of Italy and the U.S. over the past two decades. In this study, we analyze three measures of regional economic performance in each country and three statistical measures of regional inequality: the coefficient of variation (Sigma convergence), the relative size of the differences between the highest and the lowest regions in per capita outputs and family incomes, and simple regression tests for the unconditional convergence of per capita outputs or family/median household incomes across regions of Italy and the U.S. from the early 1980s to the late 1990s. Findings in this paper will illustrate the comparative degree of inequality in regional economic performance measures within Italy and the U.S., estimate differences in the degree of inequality across these three measures within both countries, and analyze convergence trends over time in regional economic performance for each of these measures within both countries. Factors contributing to the remaining differences in regional inequality within these two countries will be identified, and future research issues will be reviewed.