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After converging for almost 50 years, nominal regional wages have diverged since 1980. The source of this switch in direction either as an intertemporal change in the market prices for worker attributes or as an intertemporal change in the levels of worker attributes is examined. In reviewing 9 census regions between the periods 1973-1975, 1979-1981, and 1985-1987, results using individual workers from the Current Population Surveys show that differences in characteristic prices account for a major share of the change in regional wages relative to the national average. Theory suggests that worker characteristics' prices will converge in the presence of free market commodity trade and in the absence of market imperfections. Another possibility for the divergence is changes in the regional prices of housing and other nontraded goods that deviate from the national average. Temporary shocks from the 1980-1982 …