Should all Iranian Citizens Receive the Same Subsidy Rebate?

Hassan Molana and Abolfazl Rahimi ()
Additional contact information
Hassan Molana : University of Dundee
Abolfazl Rahimi : Shahid Beheshti University

Journal of Money and Economy, 2014, vol. 9, issue 3, 1-31

Abstract: 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 Center 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.

Keywords: Cluster regression; Demographic features; Engel curve; Household equivalence scale; Iran (search for similar items in EconPapers)
JEL-codes: I30 I31 I32 I38 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://jme.mbri.ac.ir/article-1-130-en.pdf (application/pdf)
http://jme.mbri.ac.ir/article-1-130-en.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mbr:jmonec:v:9:y:2014:i:3:p:1-31

Access Statistics for this article

More articles in Journal of Money and Economy from Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran Contact information at EDIRC.
Bibliographic data for series maintained by M. E. ().