Regional Income Inequality and Economic Growth: A Spatial Econometrics Analysis for Provinces in the Philippines

Valerien Pede (), Adam H. Sparks and Justin McKinley

No 124402, 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia from Australian Agricultural and Resource Economics Society

Abstract: This paper revisits the inequality-growth relationship using data at the sub-national (provincial) level in the Philippines over the period 1991- 2000. A conditional convergence growth model is considered where the growth of per capita income depends on inequality and other growth factors. The contribution of each province to the overall inequality obtained from the Theil index is considered. Results indicate that inequality has a positive and significant effect on per capita income growth. However, the magnitude of the inequality effect is not stable across regions. Geographically Weighted Regression estimates show that the magnitude of the inequality growth relationship varies over a range of 0.72 to 3.36. Other results are also noteworthy in this study. Per capita income grows faster in provinces that contribute more to the overall inequality. Provinces with higher poverty incidence tend to grow less and human capital appears to be a significant booster to per capita income growth. Additionally, urban provinces tend to grow faster than the rural ones.

Keywords: Community/Rural/Urban Development; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 23
Date: 2012
New Economics Papers: this item is included in nep-fdg, nep-geo, nep-pbe and nep-ure
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare12:124402

DOI: 10.22004/ag.econ.124402

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