Income inequalities among Greek prefectures, 1995-2005: investigation for the existence of convergence clubs

Abstract

The evaluation of income inequalities among spatial units–economies and the monitoring of their evolution is an issue of extreme importance in the field of regional science as it demonstrates the role of market dynamics and appraises the effectiveness of regional policy. The present research investigates the existence of club convergence, in per capita GDP terms, among the prefectures of Greece during the period 1995–2005. The methodology of club convergence relies on recent models of economic growth and indicates the existence of convergence among spatial units–economies inside convergence clubs without the precondition of convergence among those clubs. The results of econometric analysis do not verify trends of club convergence among Greek prefectures. In contrast, they reveal clear trends of divergence, stressing out, in parallel, the underestimation trend of the country’s regional problem.