Poverty and municipal production in the State of Mexico. A Durbin model of spatial effects, 2020

Abstract

Following Mexico City, the State of Mexico is the most important entity in the country due to its contribution to the gross domestic product; however, it is the entity that houses the largest number of poor people. Hence it is argued that the economic growth of the entity has not been sufficient to generate the conditions for homogeneous development among its municipalities, which is manifest in better social indicators, including poverty reduction. This article analyzes the poverty levels of the municipalities in the State of Mexico and identifies the subsectors with the highest degree of specialization that can contribute to reducing the entity's poverty levels. With municipal statistical information from 2020, a spatial Durbin model (SDM) is estimated to model the determinants of poverty and the existence of spatial neighborhood and spatial diffusion and identify whether the productive specialization of municipalities can be a factor that contributes to the reduction of poverty. The results showed that there is a spatial association of poverty at the municipal level and that economic activity – based on gross census value added –, per capita social spending, and attention to social conditions such as educational backwardness and lack of health services are factors of spatial diffusion that can contribute to poverty reduction.