Regional economic disparities, spatial dependence and proximity structures

Abstract

Since some decades, inequality has been attracting a growing interest within political debate as well as in theoretical and empirical studies. Considering inequality at a regional level offers useful insights for policy makers, facilitating the assessment of the effectiveness of strategies aimed at reducing regional disparities and helping in developing place-based actions. The study of regional inequality poses some relevant issues related to the spatial nature of data. In fact, dealing with georeferenced data implies the opportunity of considering the spatial interactions among regional units that are likely to play a role in shaping the inequality dynamics. Some studies have highlighted the importance of incorporating spatial effects in a traditional measure of inequality such as the Gini index. These studies are based on the definition of a proximity structure, which allows one to discriminate between the spatial and the non-spatial component of inequality. Different definitions of the proximity structure are likely to influence the spatial component of inequality. Those aspects are analysed in the present paper to offer more detailed insights in the territorial dimension of inequality. The measures and their decompositions are discussed in the case of European NUTS 3 regions.