A Structural Equation Modeling of the Wealth and Welfare Components in Iranian Households: Rural and Urban Dichotomies

Abstract

Background: Increasing social welfare and reducing poverty are to ensure the well-being of all classes of a society. Cities and villages are distinguished by cultural and economic disparities. The purpose of this study was to develop and present a comprehensive model on welfare and wealth components and their relationship with each other, as well as determining the contributing factors and variables affecting them by presenting a comprehensive model. Methods: The components of wealth and welfare were determined based on the national data comprising 19261 rural and 18701 urban household participants. Initially, the conceptual model was drawn. Later, observed and latent variables of the model were analyzed and tested using AMOS software, in two exploratory and confirmatory factor analyses. Finally, the Structural Equation Modeling was used to analyze the data and investigate the causal relationship of latent variables.Results: The findings showed that the factors generating wealth in the urban initiate from education and lead to employment and then into income and ultimately provide wealth and welfare. Plus, there is no separation between the concept of welfare and wealth in urban society. However, land ownership is the prerequisite for wealth and welfare issues in a rural community. Moreover, wealth and welfare are two distinct phenomena in rural areas. Conclusions: The results of this study would provide the clear hints for effective policy making to resolve deprivation and poverty in Iranian rural and urban populations, prioritizing education for urban and land ownership for rural areas.