چکیده:
The ‘Subsidy Targeting Project’ was introduced by the government of Iran in 2010 to ease the impact of removing price subsidies (carried out as part of recent economic liberalization reforms). Under this scheme, regardless of their socio-economic characteristics, Iranian citizens residing in Iran receive the same amount of cash rebate (currently 455,000 Iranian Rials per month). This paper uses the equivalence scales approach to query the fairness of this policy exercise. We use Iran’s Household Expenditure and Income Surveys datasets for 1984- 2007 (compiled annually by the Statistical Centre of Iran) to estimate the Engel-curve-based equivalence scales which take account of the main household features: size, geographic location, and a number of characteristics of head of household. Our estimates suggest a clear profile of redistribution which questions the fairness of disregarding households’ characteristics in such a large scale redistribution exercise which was primarily designed to offset the welfare impacts of removing price subsidies.
خلاصه ماشینی:
We use Iran’s Household Expenditure and Income Surveys datasets for 1984-2007 (compiled annually by the Statistical Centre of Iran) to estimate the Engel-curve-based equivalence scales which take account of the main household features: size, geographic location, and a number of characteristics of head of household.
More specifically, for each year t =1997, 1999, 2001, 2003, 2005, 2007, we estimate different versions of the regression equation (View the image of this page) By allowing for households’ characteristics, where w and E as before denote the household-level of food expenditure share and total expenditure, respectively, and the effects of the socio-demographic factors which are taken into account are reflected in the coefficient estimates.
Given that the equivalence scale analysis based on the Engel curve rest on the assumption that food expenditure shares are inversely (and monotonically) related to the welfare levels, in Table 2 below we depict the behavior of food expenditure shares over time, separately for rural and urban households of different sizes.
However, addressing urban and rural areas separately has the big disadvantage that the welfare gap between the two may grow and for this reason policy makers need to pay attention to both ES calculations presented in figures F1 and F2 to monitor the urban-rural gap Having illustrated the main issues concerning the calculation and use of ES by means of analyzing the preliminary ES indices which only take account of the households’ size and their urban/rural locality of residence, in the rest of this section we briefly examine the equivalence scales corresponding to the more general Engel model in equation (7), which we construct using the estimates reported in Table 4 (the results are available on request in the form of bar chart.