Divergence or Convergence in Regional Inequality - Consumption Variables Versus Policy Variables: The Israeli Case

ABSTRACT

One of the prevailing arguments with respect to the relationship between the changes in regional inequality and national economic growth, is that up to a certain stage in national economic growth regional inequality increases, and from that stage on it decreases. The results of the present study enable us to formulate a different hypothesis which argues that measures of inequality may increase or decrease - even simultaneously - depending on whether the variables being measures are “policy” or “consumption” variables. The methodological discussion will claim that there is no “single variable” for determing economic welfare.