1 CONVERGENCE AMONG THE SPANISH REGIONS: AN INFERENCE-BASED STOCHASTIC DOMINANCE APPROACH

The traditional analysis of economic convergence between countries or regions is usually performed by comparing distribution means, such as per capita income. However, this kind of analysis, which is intimately related to the economic welfare of a society, presents only a partial approach to the economic convergence phenomena, given that the disparities within regions or countries are not considered. The empirical methodology used in this paper complements the traditional convergence approach, adding the aspects of efficiency and inequality in income distribution. Using first and second stochastic dominance, together with Lorenz dominance, the convergence between Spanish Regions from 1990 to 2003 is studied by means of per capita income data taken from the Spanish Household Budget Survey (EPF) of 1990-1991 and the Survey on Income and Living Conditions (SILC) of 2003