Fitting regional income distributions in the European Union

Cross-sectional distribution of per capita (log) GDP across the European Union regions from 1977 to 1996 is analysed. Kernel density estimates reveal a multimodal structure of the distribution during the 1970s and early 1980s, and a tendency towards unimodality since the mid-1980s. The distribution is further analysed by a mixture of normal densities. A two well-separated component mixture fits the distributions in the 1970s and early 1980s. These two clusters tend to converge, supporting the idea of a process of catching up. In the mid-1990s, a small group of very rich regions is generated by a separated component.