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Convergence Across the United States: Evidence from Panel ESTAR Unit Root Test

International Advances in Economic Research volume 16, pages 52–64 (2010)Cite this article

Abstract

Many empirical studies try to test whether there is income convergence across metropolitan areas in the continental United States. Drennan et al. (Journal of Economic Geography 4(5), 2004) claim that income among metropolitan economies is diverging for the period 1969–2001, after applying univariate unit root tests to the time series data. This paper brings new information to this area of study by using the nonlinear panel unit root test of the Exponential Smooth Auto-Regressive Augmented Dickey–Fuller (ESTAR-ADF) unit root test on the time series data for the period 1929–2005. Our results find evidence of stationarity for time series and thereby support beta and sigma convergence among states in a nonlinear setup. However, when the non-linear test encompasses cross section dependence as advocated by Cerrato et al. (2008), the evidence is attenuated.

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Notes

  1. http://www.bea.doc.gov/bea/regional/reis

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Authors and Affiliations

  1. ITC, Hong Kong Polytechnic University, Hung Hom, Hong Kong

    Chi-Keung Marco Lau

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  1. Chi-Keung Marco Lau
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Correspondence to Chi-Keung Marco Lau.

Appendix

Appendix

Table 4 States included
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Lau, CK.M. Convergence Across the United States: Evidence from Panel ESTAR Unit Root Test. Int Adv Econ Res 16, 52–64 (2010). https://doi.org/10.1007/s11294-009-9241-8

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  • DOI: https://doi.org/10.1007/s11294-009-9241-8

Keywords

  • United States income convergence
  • Nonlinear panel unitroottest
  • ESTAR
  • Cross section dependence

JEL

  • C10
  • F01
  • J10
  • O10
  • O40