Income Inequality and Economic Convergence in Turkey

Abstract

Even though the convergence of regional per capita incomes has been a highly debated issue internationally, empirical evidence regarding Turkey is both limited and contradictory. This paper is an attempt to investigate regional income inequality and convergence dynamics in Turkish gross domestic product. First, the Theil coefficient of concentration index has been employed in order to analyze the dispersion aspects of the convergence process which shows a procyclical character. Then, we investigate the convergence dynamics, taking regional interdependencies into account. Empirical results indicate that there is convergence at the national level. Moreover, the spatial error model is preferred by the model selection criteria, indicating that the typical least-squares regional convergence model is misspecified.