Comparison of cross-country measures of sigma-convergence in per-capita income, 1960–2010

Rati Ram

Applied Economics Letters, 2018, vol. 25, issue 14, 1010-1014

Abstract: The evidence on sigma-convergence in income indicated by (a) coefficient of variation (CV) and (b) SD of logarithms (SDLOG) is considered for a large cross-country sample covering the period 1960–2010. Three main points are noted. First, the two measures yield qualitatively similar scenarios, and both indicate sigma-divergence in income over the period. Second, however, they do show large differences in the rate of change in income inequality, and SDLOG indicates divergence at a much higher rate than CV. It seems likely that SDLOG would indicate greater divergence, or weaker convergence, than CV in many cases. Third, therefore, researchers are urged not to rely too heavily on one or the other measure for an inference on sigma-convergence, and it seems appropriate to consider both for drawing reasonable conclusions on convergence in income and many other variables studied by scholars.

Date: 2018
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DOI: 10.1080/13504851.2017.1391992

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