An Investigation of Per Capita Consumption Convergence of Iran's Provinces in 2000-2014

This paper aims at the convergence of economic welfare in the provinces of Iran. To achieve economic and social cohesion in this regard, the process of decision-making and providing a mechanism is of particular importance. In addition, since long, the government has sought to reduce income and consumption inequality across the provinces of Iran. This study adopts the per capita consumption convergence hypothesis to deal with the issue in all the provinces of Iran. The study is done using various methods such as unit root test, convergence club and Tile-statistics. Also, a new mechanism is used for economic modeling and analysis i.e. cluster analysis. Since Iran's provinces have different levels of productivity and economic growth, this analysis is of great importance. The results confirm the divergence in terms of average per capita consumption of households. It is to say that divergence in average household consumption may be a sign of significant differences in per capita growth in all the provinces.