Abstract:
In this study, risk aversion behavior in the Iranian economy has been explained. For this purpose, using various econometric methods, risk aversion parameter and sanctions intensity index in the Iranian economy during the period of April 2007 to March 2020 has been estimated. Then the average individual and social characteristics in Iranian society and inequality index using households' income and expenditur survey data and household income is calculated. The results show that the increase in the average age of the population, rental rates, gender ratio of women in society, the share of the married population in the population, fluctuations in GDP and the intensification of sanctions lead to an increase in risk aversion in the economy. Also, increasing economic growth, years of education, urbanization, household size, increasing income inequality, improving labor market conditions and car ownership rates are factors in improving risk taking in the economy.
Machine summary:
The results showed that an increase in the average age of the population, the rental rate, the female gender ratio in society, the share of married people in the population, fluctuations in Gross Domestic Product, and the intensification of sanctions lead to an increase in the level of risk aversion in the economy.
Additionally, increased economic growth, years of education, expansion of urbanization, household size, increased income inequality, improvement in labor market conditions, and car ownership rates are factors that improve risk-taking in the economy.
If this index is increasing over time, it means that investors and entrepreneurs demand higher returns and risk premiums to accept an investment project with similar characteristics over time; if the market does not have the ability and possibility to provide such returns for these individuals, they may enter non-productive activities, leading to a decrease in employment and economic growth in the future.
The present article examines the relationship between social, economic variables, and the sanction index with the level of risk aversion in the Iranian economy from Farvardin 1386 to Esfand 1.
Subsequently, by calculating the average of social indices (age, education, share of employed in the total population, ratio of married people in the population, gender ratio, rental rate, car ownership rate, and average household size, and the share of net expenditures from the first to the tenth decile) from monthly household income and expenditure survey data, the effects of social variables, the sanction intensity index, and gross domestic product on the risk aversion index have been estimated.
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