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Income convergence clubs for Brazilian Municipalities: a non-parametric analysis

Márcio Laurini, Eduardo Andrade and Pedro Valls Pereira

Applied Economics, 2005, vol. 37, issue 18, 2099-2118

Abstract: This article analyses the evolution of relative per capita income distribution of Brazilian municipalities over the period 1970-1996. Analyses are based on non-parametric methodologies and do not assume probability distributions or functional forms for the data. Two convergence tests have been carried out - a test for sigma convergence based on the bootstrap principle and a beta convergence test using smoothing splines for the growth regressions. The results obtained demonstrate the need to model the dynamics of income for Brazilian municipalities as a process of convergence clubs, using the methodology of transition matrices and stochastic kernels. The results show the formation of two convergence clubs, a low income club formed by the municipalities of the North and Northeast regions, and another high income club formed by the municipalities of the Center-West, Southeast and South regions. The formation of convergence clubs is confirmed by a bootstrap test for multimodality.

Date: 2005
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Working Paper: Income Convergence Clubs for Brazilian Municipalities: a Non-Parametric Analysis (2004) Downloads
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DOI: 10.1080/00036840500218554

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