Module 8: Assignment: Analysis and Convergence Hypothesis

Module 8: Assignment: Analysis and Convergence Hypothesis

Review the lecture ECON_760_M8. Select 7 counties in a US state.

Search https://www.bea.gov/data/income-saving/personal-income-by-state for personal income per capita for those counties. Include in your final assignment from 1971 to 2020. Identify whether beta convergence holds in the chosen state.

  1. Evaluate the convergence σ. (See slides 36, 47, and 50 of the presentation).
  2. Construct a scatterplot where the growth rate for the period is on the y-axis, and the personal income per capita for the initial year of the period under analysis is on the x-axis.
  3. Indicate whether the β convergence holds graphically. (See slides 48 and 49 of the presentation).
  4. Evaluate graphically if there is spatial dependency in the period of analysis (see slide 29 of the presentation).
  5. Present the Moran Test (graph) and explain your result (see slides 32 and 34 of the presentation).
  6. Evaluate β-convergence by running OLS, SAR, and SEM. In each case:

○ Explain the sign of β and its meaning.

○ Calculate and explain the rate of convergence (θ). (See slide 40 of the presentation) Explain R2.

○ Evaluate homoscedasticity (see slide 57 of the presentation).

○ Present a summary of your regressions in GeoDa (see slides 56 and 72 of the presentation).