TITLE:
An Analysis of Regional Income Variation among the Five Regions of Oklahoma
AUTHORS:
Orley M. Amos Jr., Tim C. Ireland
KEYWORDS:
Regional Income Inequality, Kuznet’s Inverted-U, Income Convergence
JOURNAL NAME:
Modern Economy,
Vol.6 No.2,
February
3,
2015
ABSTRACT: This paper investigates recent trends of per capita personal income in
the state of Oklahoma to ascertain what if any long-run trends are exhibited.
Standard theoretical analysis suggests that per capita incomes are expected to
converge, especially across regions. However, recent research indicates that
the national trend is one of the regional income divergences. The question
posed by this paper is whether or not the per capita income in Oklahoma
supports evidence of divergence. The data for 1969 to 2012 obtained from Department
of Commerce, Bureau of Economic Analysis (BEA) are analyzed. These data are
used to regionalize the state into five distinct county-based areas. Results
suggest that Oklahoma exhibits a transitional pattern from convergence to divergence
during the period of study. The three objectives of this study are: 1) a test
of the growth pole cycle theory; 2) an extension of previous analysis of
Oklahoma regional income variation; and 3) a preliminary test of the impact of
the 2008 recession on regional income variation. After identification and
analysis of the five substate regions, an overview of the growth pole cycle
theory explaining the hypothesized pattern is provided, followed by an
exposition of the analytical methodology. The analytical results are twofold,
first, a baseline analysis regressing variation on per capita income and
second, the inclusion of the unemployment rate.