The Effect of Subsidy Targeting on the Iranian Urban Household’s Expenditure Patterns

Document Type : Original Article

Authors

1 Department of Economics, Faculty of Management, Economics and Accounting, Tabriz Branch, Islamic Azad University,

2 MA in Economics, Faculty of Manegement, Economics and Accounting, Tabriz Branch, Islamic Azad University

Abstract

Expenditure pattern is how to combine various expenditure to form a certain level of household consumption level. After optimization of current and future consumption, household chooses combination of expenditure that maximizes current and future welfare together. In this research we examine the effects of implementation of Subsidy Targeting plan on the Iranian urban household’s expenditure pattern within years 2004-2013 using panel-data method.
The results show that in urban segment, targeted subsidies had a significant impact on 9 of the 14 expenditure groups. Among the 5 groups share of meaning food, transportation, cultural and entertainment, hotel and restaurants other goods and services expenditures have increased. Whereas, share of 4 groups health care, communications, education and investment expenditures have reduced. Therefore it could be argued that targeted subsidies plan implementation through changes in the composition of expenditures had a significant impact on the expenditures pattern in urban segment.

Keywords

References

-    Aboulein, E-Laithy & kheir-E-Din, H) .2009(. The Impact of Phasing of Subsidies of Petroleum Energy Prodocds in Egypt .The Egyptian Center for Economic Studies. Working Paper No. 145.
-    Ansari, V & Salami, H. (2014). Allocating Income from Targeting Subsidy to the Production Sectors: Distributional Impacts of Different Alternatives for the Iranian Households, The Economic Research, 14(2), 135-156 (In Persian).
-    Hazeri Niri, H & Husseini Nasab, E. (2014). Computable General Equilibrium Analysis of the Welfare Effects of Reform of Energy Carriers’ Subsidies: Hicksian Equivalent Variation Index, The Economic Research, 14(2), 21-40 (In Persian).
-    Lin, B. & Jiang, Z. (2011). Estimates of Energy Subsidies in China and Impact of Energy Subsidy Reform. Energy Economics, 33(2), 273-383.
-    Ranjbar, H,. Fotros, M. H. & Kabirian, M. (2014).Effects of Subsidies Targeting on Costumers’ Welfare Equivalent Variations in Iran, Applied Economics Studies in Iran, 3(9), 133-149 (In Persian).
-    Sadeghih,H., Shahab Lavasani, K & Baghjari, M. (2010). The Effects of Energy Price Adjustment on Macroeconomic Variables: Structural Vector Auto Regressive approach, Journal of Research in Economics Modeling, 1(1), 49-76 (In Persian).
Journal of Economics and Modelling
Volume 7, Issue 26 - Serial Number 26
September 2016
Pages 33-48

Files

Share

How to cite

Statistics