Examination of Income Convergence of Iranian Provinces: Panel Data Approach

Land use planning, to achieve regional balance, eliminating imbalances and reducing the income gap among the provinces are important topics for planners and policy makers. Also, evaluation of regionalism balances and gaps among provinces is one of the major topics of study for economists and other specialists in the field of social sciences. One of the key areas of imbalance and the gap among the provinces can be the difference in their economic growth and per capita real income, which in turn could result in the imbalance in other areas. In contrast, reducing the imbalances in income and economic growth can provide grounds for reducing imbalances in other areas. One of the main tools to evaluate the gaps and imbalances among the different areas is the convergence is testing. If the hypothesis holds, the poorer economies will have faster growth rates than hypothesis rich economies and this difference in growth rate in the long run can reduce the gaps and imbalances among them. In fact, the confirmation of Hypothesis of convergence means reduction in regional imbalances. Therefore, the main purpose of this paper is to investigate the economic growth of the Iranian provinces over the period2010-2000, with particular emphasis on absolute and conditional convergence hypothesis.