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

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  • Pede, Valerien O.
  • Sparks, Adam H.
  • McKinley, Justin D.

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.

Suggested Citation

  • Pede, Valerien O. & Sparks, Adam H. & McKinley, Justin D., 2012. "Regional Income Inequality and Economic Growth: A Spatial Econometrics Analysis for Provinces in the Philippines," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124402, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare12:124402
    DOI: 10.22004/ag.econ.124402
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    References listed on IDEAS

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    Cited by:

    1. Burhan Can Karahasan, 2020. "Winners and losers of rapid growth in Turkey: Analysis of the spatial variability of convergence," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 603-644, June.
    2. Haijiang Wu & Qichao Wu, 2021. "The geography of migrant workers' income in China: Evidence from a migrants dynamic survey in 2017," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1826-1851, September.
    3. Muhammad Shahbaz & Ijaz Rehman & Nurul Mahdzan, 2014. "Linkages between income inequality, international remittances and economic growth in Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1511-1535, May.

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