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The Effect of Housing Rent on Consumption of Durable and Non-Durable Goods (Iranian Urban Households in Selected Provinces)

Fatemeh Ansari (), Mohsen Ebrahimi () and Mehdi Joudan ()
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Fatemeh Ansari: PhD student in Financial Economics, Urmia University
Mohsen Ebrahimi: Associate Professor of Economics, Kharazmi University
Mehdi Joudan: PhD student in Financial Economics, Yazd University

Quarterly Journal of Applied Theories of Economics, 2021, vol. 8, issue 3, 217-242

Abstract: Housing one of the most basic needs of any household, which accounts significant share of household expenditure. The main purpose study is to investigate effect of housing rent on consumption of durable and non-durable goods of Iranian urban households. For this purpose, 24 selected provinces, according to the report of the Statistics Center of Iran, are divided into two low-income and high-income deciles (based on the coefficient of food consumer goods, higher coefficient is the low-income deciles of the society). result, in the period 2011-2020 by the dynamic panel method in two separate groups; The effect of housing rent on the consumption of durable and non-durable goods has been studied. The Sargan, Arlano, and Bond tests are also presented to evaluate suitability of the model and interpret results of the usage estimates and their results. Estimated results show provinces with high income deciles have increased consumption of durable goods %1.32 and consumption of non-durable goods % 0.23 with increase in housing rents, and if consider durable goods as wealth; Renting housing for high-income deciles has increased wealth. On the other hand, low-income deciles have reduced consumption of durable goods -%4.57 and consumption of non-durable goods -%0.15 with increase cost of renting housing. Therefore, based on research findings, recommended that policy makers and the government do not ignore this gap in household consumption behavior, have more control the cost of housing rent so that the consumption basket of low-income households is not smaller and more limited for the benefit of high-income groups

Keywords: Consumption of durable goods; consumption of non-durable goods; cost of housing rent; dynamic panel model (search for similar items in EconPapers)
JEL-codes: C23 L67 L68 R31 (search for similar items in EconPapers)
Date: 2021
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