A Spatial Analysis of Poverty and Income Inequality in the Appalachian Region

Abstract

The Appalachian Region has neared parity with the national average in terms of poverty rate but Appalachian residents are still poorer than the non-Appalachian residents. The relationship between poverty and income inequality has continued to be region specific and understanding the relationship is important to evaluate how a development strategy would benefit the region. Cross sectional county level data from 1990 and 2000 are used to examine the relationship between poverty and income inequality in the region. Since spatial models fail to capture the spatial dependence of the variables across the region, a spatial regression approach is used in the study. The empirical results indicated an inverse relationship between poverty and income inequality in the Appalachian region. Keywords: Poverty rate, Income inequality, Gini coefficient, Spatial Durbin Model