Divergence or convergence?

Researchers have emphasized different aspects of income inequality, including the statistical evidence of interregional per capita income convergence (following the economic growth theory) and the increase in individual income inequality. This study clarifies these issues, by analyzing the interregional income inequality of cities, towns and villages data in Japan from 1986 to 1999. The results of this empirical analysis show that the interregional income inequality decreases in the 1990s, in spite of the increase in individual income inequality.