Income Convergence of the Counties: The Case of Mississippi
The paper deals with income convergence issue, related to external shocks and income per capita, in the Mississippi County, the USA. The legalization of casinos in Mississippi in 1992 provides a natural experiment to examine the effect of external shocks on the per capita income and, hence, on the issue of convergence or divergence. A change in per capita of some Mississippi counties does not change the convergence of all the counties in the state. If the affected counties were all at the bottom of the income ladder, and their income increased sufficiently enough, then both beta-convergence and sigma-convergence can occur. Otherwise, the outcome is not predictable a priori.