Regional Growth and Income Convergence in the Western Black Belt Counties of Alabama: Evidence from Census Block Group Data

This paper examines the effects of growth in African American population, employment, and human capital on growth in per capita income at the census block group (CBG) level using ordinary least square and spatial regression models, The results indicate the presence of conditional income convergence between 1980 and 2000 with poorer CBGs growing faster than the wealthier CBGs, The results also suggest a significant negative relationship between per capita income growth and growth in African-American population. In addition, this study finds that sub-county level data is useful for a realistic understanding of economic growth processes and patterns in rural communities. Introduction Income convergence is one of the major indicators of regional economic development (Cass, 1965; Solow, 1956). Large differences in income are considered undesirable for balanced or equitable economic development (Sen, 1992). Substantial research has been conducted to determine whether there is convergence or divergence in regional economies over time, These studies were designed to track the growth of local economies and assess their pace and progress in achieving national economic growth levels, Previous research suggests the existence of income convergence and in some cases, income divergence across the United States (Mankiw et aI., 1992). Some of the empirical evidence (Barro and Sali-iMartin, 1995; Cole and Neumayer, 2003) contradicts neoclassical growth theorists' prediction (Baumol, 1986) that poorer economies grow at a faster rate compared to the richer economies to reach equilibrium levels. Variations in the results of these studies may be due to the differences in economic characteristics of "studied regions" since it has been difficult for the "studied regions" to maintain the same steady state, a fundamental condition for determining the existence of income convergence, Other sources of variation may have been differences in the spatial characteristics across regions and difficulties in capturing these interregional variations of the "studied regions." That is, most of the "income convergence studies" thus far have been conducted at larger geographic scales such as county, region, state, or national levels, These studies did not address clustering of the communities based on similarities in physical geography and socio-economic characteristics. The concentration of primary resources, such as farmland and forests or agglomeration in the manufacturing sector, was inadequately addressed.