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Population diversity, which is defined nationally as ethnic, cultural, religious, and tribal heterogeneities, is a key factor affecting regional economic growth. On one hand, It leads to disparity of preferences, discrimination, counter productivity policies and decreasing regional growth. On the other hand, ethnic and religious mix is of advantages including diversity in abilities, experiences, and cultures that may result in productivity, creativity, innovation and increasing regional economic growth. Thus, there is a trade-off between benefits and costs of heterogeneity of population in a diverse multiethnic society. A question arises here is that whether population diversity has positive or negative impact on regional economic growth? Moreover, what is the effect of population diversity on regional growth in Iran? This paper examines the effects of population diversity on regional economic growth, using Panel Data model for 28 provinces of Iran over the period 1999-2006. The results show that religious heterogeneity (Fragmentation index and Polarization index) has negative effect on regional economic growth in Iran.  

Keywords: Diversity, religion, Ethnicity, Regional Economic Growth, Panel Data

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