US MSA PCPI Trends: Evidence on Convergence and Divergence

Abstract

Recent literature suggests that whether you observe state level convergence or divergence in PCPI depends largely on whether period beginning or ending quintile income groupings are used. The prior literature demonstrates that state income distributions based upon 1969 quintiles indicate PCPI convergence, while 2012 quintiles generate the opposite result. Evidence presented in this paper confirms similar patterns through 2017 confirming that previous results are more than recession driven anomalies. We also find considerable variability within MSA rankings over the 1969-2017 time period, a finding which suggests that MSA income performance is considerably more complex than superstar city paradigms would predict.