CONVERGENCE PROCESS ANALYSIS AT THE LOCAL AND REGIONAL LEVELS IN CROATIA

Based on personal income data the paper analyses the convergence process at the local and county levels in the Republic of Croatia between 2002 and 2018 using the concept of sigma and beta convergence. In addition, mobility of local and county units was tested using the transition probability matrix based on the Markov chain. The results of the conducted research indicate the reduction of income inequalities at the local and county levels and the presence of absolute and conditional beta convergence. Further analysis shows that convergence is markedly stronger after 2014. The results of the transition probability matrix suggest that the convergence process takes place primarily through changes in the middle part of the distribution. In other words, the poorest local and county units still have very little chance of changing their relative position.