Empirical Economics

, Volume 56, Issue 5, pp 1683–1705 | Cite as

Mexico’s inter-regional inequality: a convergent process?

  • Alfonso Mendoza-Velázquez
  • Daniel Ventosa-SantaulàriaEmail author
  • Vicente Germán-Soto


Using a recently proposed Euclidian measure to quantify inter-regional inequality in per capita GSP (gross state product), we study the convergence among Mexican states during the 1940–2010 period. In ten cases, we find that GSP inequality diverges while the rest of the states’ GSP inequality can be described as the following catching-up or lagging behind processes. For the later processes, we also find evidence of structural breaks. The shifts in the evolution of regional inequality in Mexico for various cases coincide with two distinct periods: the “Mexican Miracle” phase and the “oil/debt crisis” phase.


Inter-regional inequality Euclidean inequality measure Mexico Unit roots Deterministic trends Structural breaks 

JEL Classification

O10 O40 R1 



The authors thank the efficient research assistance of Luis Arturo Medina Roa, Miguel A. García-Flores at CIIE-UPAEP, and Guillermo Verduzco Bustos at CIDE.

Supplementary material

181_2017_1401_MOESM1_ESM.pdf (81 kb)
Supplementary material 1 (pdf 81 KB)
181_2017_1401_MOESM2_ESM.xlsx (71 kb)
Supplementary material 2 (xlsx 71 KB)


  1. Bai J, Perron P (1998) Estimating and testing linear models with multiple structural changes. Econometrica 66(1):47–78CrossRefGoogle Scholar
  2. Bai J, Perron P (2003) Computation and analysis of multiple structural change models. J Appl Econom 18:1–22CrossRefGoogle Scholar
  3. Benabou R (1996) NBER macroeconomics annual. In: Bernanke BS, Rottemberg JJ (eds) Inequality and growth, vol 11. MIT Press, Cambridge, pp 11–74CrossRefGoogle Scholar
  4. Bernard AB, Durlauf SN (1995) Convergence in international output. J Appl Econom 10(2):97–108CrossRefGoogle Scholar
  5. Bernard AB, Durlauf SN (1996) Interpreting tests of the convergence hypothesis. J Econom 71(1):161–173CrossRefGoogle Scholar
  6. Bleaney M, Nishiyama A (2003) Convergence in income inequality: Differences between advanced and developed countries? Econ Bull 4:1–10Google Scholar
  7. Carlino GA, Mills LO (1993) Are US regional incomes converging?: A time series analysis. J Monet Econ 32(2):335–346CrossRefGoogle Scholar
  8. Carrion-i Silvestre JL, Germán-Soto V (2007) Stochastic convergence amongst Mexican states. Reg Stud 41(4):531–541CrossRefGoogle Scholar
  9. Cowell FA (2011) Measuring inequality. Oxford University Press, LondonCrossRefGoogle Scholar
  10. Evans P, Karras G (1996) Convergence revisited. J Monet Econ 37:249–265CrossRefGoogle Scholar
  11. Ezcurra R, Pascual P (2005) Is there convergence in income inequality levels among the European regions? Appl Econ Lett 12:763–767CrossRefGoogle Scholar
  12. García-Verdu R (2010) El Indice de Desarrollo Humano y su Aplicacion a las Entidades Federativas en MexicoFondo de Cultura Económica, MéxicoGoogle Scholar
  13. German-Soto V (2005) Generación del producto interno bruto mexicano por entidad federativa, 1940–1992. El Trimestre Económico, pp 617–653Google Scholar
  14. Germán-Soto V (2016) A regional inequality index using aggregate data. MRPA Working Papers (71876)Google Scholar
  15. Germán-Soto V, Chapa-Cantú JC (2015) Cointegration with structural changes between per capita product and income inequality in Mexico. Appl Econ 47(49):5215–5228CrossRefGoogle Scholar
  16. Gomes F (2007) Convergence in income inequality: the case of Brazilian municipalities. Econ Bull 15:1–9Google Scholar
  17. Gómez-Zaldívar M, Ventosa-Santaulària D (2010) Testing for deterministic trend when there is evidence of unit root. J Time Ser Econom 2(2):1–26Google Scholar
  18. Guerrero I, López-Calva LF, Walton M (2009) No Growth without equity? Equity, competition, and growth in Mexico. In: Levy S, Walton M (eds) The inequality trap and its links to low growth in Mexico. Palgrave Macmillan, BasingstokeGoogle Scholar
  19. Hekmatfar M, Farahani RZ (2009) Facility location: concepts, models, algorithms and case studies. Springer, BerlinGoogle Scholar
  20. Hernández-Laos E (1992) Crecimiento económico y pobreza en México: una agenda para la investigación. Universidad Nacional Autónoma de México, Centro de Investigaciones Interdisciplinarias en HumanidadesGoogle Scholar
  21. Hernández-Laos E (2000) Crecimiento económico, distribución del ingreso y pobreza en México. Comer Exter 50(7):863–873Google Scholar
  22. Kapetanios G (2005) Unit-root testing against the alternative hypothesis of up to m structural breaks. J Time Ser Anal 26(1):123–133CrossRefGoogle Scholar
  23. Kaplow L (2005) Why measure inequality? J Econ Inequal 3:65–79CrossRefGoogle Scholar
  24. Lewis GW, Ulph DT (1998) Poverty, inequality and welfare. Econ J 98(390):117–131CrossRefGoogle Scholar
  25. Lin P-C, Ho-Chuan H (2012) Convergence in income inequality? Evidence from panel unit root tests with structural breaks. Empir Econ 43(153–174):1–22Google Scholar
  26. López-Calva LF, Székely M (2006) Medición del desarrollo humano en México. Fondo de Cultura Económica, MéxicoGoogle Scholar
  27. OECD (2015) In it together: why less inequality benefits all. OECD Publishing, ParisGoogle Scholar
  28. Panizza U (2001) Convergence in income inequality. J Income Distrib 10:5–12Google Scholar
  29. Perron P (1989) The great crash, the oil price shock and the unit root hypothesis. Econometrica 57(6):1361–1401CrossRefGoogle Scholar
  30. Piketty T (1997) The dynamics of the wealth distribution and the interest rate with credit rationing. Rev Econ Stud 64:173–189CrossRefGoogle Scholar
  31. Quah D (1993) Galton’s fallacy and tests of the convergence hypothesis. Scand J Econ 95:427–443CrossRefGoogle Scholar
  32. Ravallion M (2003) Inequality convergence. Econ Lett 80:351–356CrossRefGoogle Scholar
  33. Simon CP, Blume L (1994) Mathematics for economists, vol 7. Norton, New YorkGoogle Scholar
  34. Szekely M (2005) Pobreza y desigualdad en México entre 1950 y 2004. Trimest Econ 72(4):913–931Google Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  • Alfonso Mendoza-Velázquez
    • 1
  • Daniel Ventosa-Santaulària
    • 2
    Email author
  • Vicente Germán-Soto
    • 3
  1. 1.Centro de Investigación e Inteligencia Económica (CIIE)PueblaMexico
  2. 2.Centro de Investigación Económica (CIDE)MexicoMexico
  3. 3.Facultad de EconomíaUniversidad Autónoma de CoahuilaSaltilloMexico

Personalised recommendations