This paper finds strong and robust evidence of convergence in per capi
ta income across the twenty-four Swedish counties, 1911-1993. In contr
ast to most previous studies on regional convergence this study adjust
s incomes to account for regional differences in the cost of living. T
he main conclusion is that using adjusted incomes as opposed to non-ad
justed incomes does not qualitatively change the results on convergenc
e for the Swedish counties. However, a quantitative difference is that
estimated speeds of convergence are higher and the standard deviation
of the log of per capita income is lower when adjusted incomes are us
ed, which is consistent with cross-country evidence. (C) 1997 Elsevier
Science B.V.