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ABSTRACT This paper empirically analyzes regional disparity in terms of convergence of per capita income across Mexican states for the period 1970-2005. In particular, this study extends the conventional cross-sectional conditional β-convergence analysis of the existing literatures on Mexico to panel data analysis, and focuses on whether the convergence performance varies between the pre- and post-economic liberalization periods. When unobservable state-specific effects are controlled by the panel data technique, the estimated coefficients show significant conditional β-convergence, even after economic liberalization, but with a lower speed than before economic liberalization. [ABSTRACT FROM AUTHOR]