An Investigation of Income Convergence in Iran, Emphasizing on Cluster Analysis

A Feghehmajidi, A Mohammadi - Journal of Economic Research and …, 2017 - qjerp.ir
A Feghehmajidi, A Mohammadi
Journal of Economic Research and Policies, 2017qjerp.ir
Investigating the convergence hypothesis among the Iran's provinces and employing
economic policies in order to achieve regional balance is one of the most important
macroeconomic issues in Iran. In this study, the hypothesis of per capita income
convergence has been investigated in Iran's provinces with using different methods such as
unit root tests, convergence club, Tile-statistic and cluster analysis. The result of unit root
tests shows that the absolute and conditional convergences between the provinces of Iran …
Investigating the convergence hypothesis among the Iran’s provinces and employing economic policies in order to achieve regional balance is one of the most important macroeconomic issues in Iran. In this study, the hypothesis of per capita income convergence has been investigated in Iran’s provinces with using different methods such as unit root tests, convergence club, Tile-statistic and cluster analysis. The result of unit root tests shows that the absolute and conditional convergences between the provinces of Iran are not confirmed. Furthermore, the results of club convergence and Tile-statistic do not confirm per capita income convergence. Also, Cluster analysis suggests non-convergence among the provinces of Iran. In general, the results of all methods indicate a strong divergence in terms of per capita income among Iran's provinces. Divergence in per capita may represent more unbalanced development in the near future. In fact, the results of the paper show different rates of economic growth among Iran’s provinces.
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