Intra-Distribution Dynamics of Regional Per-Capita Income in Europe: Evidence from Alternative Conditional Density Estimators
41 Pages Posted: 19 Sep 2006
Abstract
This paper compares different conditional density estimators to analyze the cross-sectional distribution dynamics of regional per-capita incomes in Europe during the period 1980-2002. First, a kernel estimator with fixed bandwidth gives evidence of convergence. With a modified estimator with variable bandwidth and mean-bias correction, the dominant income dynamics is that of persistence and lack of cohesion: only a fraction of very poor regions improves its position over time converging towards a low relative income. An alternative graphical technique (more informative than the traditional contour plot) is also proposed to visualize conditional densities. Finally, a first-order spatial autoregressive model is applied to estimate the effect of spatial dependence on the evolution of income distribution.
Keywords: convergence, nonparametrics, conditional density, spatial econometrics
JEL Classification: C14, R11
Suggested Citation: Suggested Citation
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