A Spatial Analysis of the County Per Capita Income Distribution in North Carolina: The Trend Toward Equality

A SPATIAL ANALYSIS OF THE COUNTY PER CAPITA INCOME DISTRIBUTION IN NORTH CAROLINA: THE TREND TOWARD EQUALITY David A. Howard, Jr." Analysis of income distribution has been a common tool for examining the economic development of a nation or region. Most such studies have emphasized the size distribution of income, and it has been established that it becomes more egalitarian with economic growth in a nation. (1 ) This, of course, is a socio-economic phenomenon, but it has stimulated the study of the spatial distribution of income as a factor in the economic development of a region. Does the spatial distribution also become more egalitarian with economic growth? The most comprehensvie study of the regional per capita distribution of income has been completed by Williamson. (2) In an extensive empirical study he has demonstrated that once a nation begins to achieve a sustained rate of economic growth there is an initial divergence of regional per capita incomes immediately followed by a convergence of per capita incomes. That is, there is a decreased variance of regional per capita incomes about the mean national per capita income. (3) Williamson's conclusion has set the theoretical basis for this research: Somewhere during the course of development, some or all of the disequilibrating forces (in the economy ) tend to diminish causing a reversal in the pattern of regional income inequality. Instead of divergence in the regional levels of development, convergence becomes the rule, with the backward regions closing the gap between themselves and the already industrialized areas. (4) Easterlin has demonstrated that state incomes converged in the United States between 1880 and 1950, and he has suggested that migration from poorer to richer regions may be a contributor to this phenomenon. (5) Perloff and Graham agree with this while Olsen and Sjaasted do not believe migration stimulates income convergence. (6) In keeping with the mobility theme, Perloff and Orsagh have shown that a movement away from agricultural employment is positively associated with income convergence. (7) Economists studying the changing nature of the spatial distribution of income have tended to emphasize the Heckscher-Ohlin idea that interregional equilibrium results from free trade coupled with free flows of labor and capital among regions. This emphasis on the factors of production and the use of highly aggregated data have prevented an examination of other factors which may be more closely related to income convergence, and, *Mr. Howard is a land use market analyst with Reynolds, Smith and Hills of Jacksonville , Florida. The paper was accepted for publication in February 1971. Vol. XI, No. 1. 197171 consequently, an understanding of the changing spatial patterns of per capita income with economic growth has yet to be found. HYPOTHESIS. It is proposed that income convergence within a nation is the result of some combination of independent factors interacting uniquely within each region to produce a net national effect. The net effect is a more egalitarian spatial distribution of per capita income. Each region represents a separate entity composed of a distinct combination of socio-economic factors. Therefore, it cannot be expected that specific variables as migration of changes in production factors will have the same effect on the redistribution of income within each region. Only by understanding the nature of the individual regions can one expect to understand the nature of the whole. Thus, income convergence is a function of the spatial differentiation of socio-economic factors within the regions of a nation or state. The purpose of this paper is to show that incomes converged among counties in North Carolina between 1940 and 1960, and to explain this in terms of Williamson's hypothesis. A multiple regression and a more general factor analytic-regression model was constructed for the Piedmont and Coastal Plain regions to illustrate that intraregional income convergence among counties within each of the two regions does not result from common factors. ANALYSIS OF THE COUNTY PER CAPITA INCOME REDISTRIBUTION . Per capita income data were collected for each county in North Carolina for 1940, 1950, and 1960, and the standard deviation of each distribution was computed. To insure standard deviations with constant returns to scale and to account for income growth, the mean state per capita income...