Assessing Territorial Units’ Contribution to Convergence Beyond Aggregate Measures: The Role of Neighbourhood

Abstract

This paper provides an analytical framework for the study of spatial income dynamics using the classical measures of σ-convergence (reduction in dispersion) and β-convergence (poor areas grow more quickly than rich ones) linked by a re-ranking metric and reinterpreted based on the ‘leave no one behind’ principle. Our approach allows identifying the contribution of each territorial unit to each of the three facets of distributional change (σ-convergence, β-convergence, and re-ranking), as well as gauging the part of each component of distributional change that corresponds to geographically neighbouring and non-neighbouring units. We illustrate our proposal by examining convergence across the census tracts of Malaga – the sixth most populated city of Spain – before and after the COVID 19 pandemic. We find that while income convergence across Malaga’s census tracts tended to improve over the period 2015–2019, this process was interrupted during the first year of the pandemic, affecting some specific census tracts. We examine our outcomes by grouping the results into deciles and districts made up of specific census tracts. Finally, we analyse the impact of neighbours on regional convergence and each of its components. This spatial decomposition highlights the crucial role of the spatial component in the convergence process.