Poverty, Growth, and Redistribution: a Study of Iran

Abstract

The paper examines changes in the extent of poverty in Iran in the period 1983 to 1993. More specifically, it investigates the contributions of growth and redistribution factors to changes in poverty over this period of ten years. The analysis is based on household-level data relating to three Household Income and Expenditures Surveys of 1983Surveys of , 1988Surveys of , and 1993. The study reveals that the extent of poverty in the rural sector declined slightly, whereas in the urban sector it increased significantly. Decomposition of changes in poverty into growth and redistribution components indicates that in each sector the redistribution component was positive, implying that the deterioration of income inequality contributed to the worsening of poverty. The growth component, however, affected the two sectors differently: it contributed to a reduction in poverty in rural areas and an increase in urban areas.

Poverty, inequality, and populist politics in Iran

“…The preferred method, as described in Lanjouw [21], first identifies a representative basket consumed by low income groups, normalizes it to 2,200 calories, evaluates it at average prices in different locations, and finally adds on non-food expenditures to arrive at the poverty line. The closest study that uses this method for Iran, and the only study of poverty published in English, is by Assadzadeh and Paul [5]. They begin with food poverty lines for rural and urban areas which are the market values in 1989 of a balanced nutrition diet defined by the Iran Institute of Nutrition Sciences and Food Technology, with different sets of prices prevailing in rural and urban areas.…”

“…These destructive events were capped by the oil price collapse of 1986 which reduced the price of Iran's main export to one-third, ending the oil price boom that had started a dozen years earlier in 1973. 5 See, for example, Raisdana et al [30] and Amuzegar [3]. Poverty rates on Iran available internationally range from 7.2% in World Bank [40], to 20% in United Nations [39], and 40% in Central Intelligence Agency [11].…”

“…There are very few studies of poverty and income distribution available in English, but none that cover the entire period. Assadzadeh and Paul [5] analyze changes in poverty during 1984-1993, but there are no studies to my knowledge of the period before the Revolution and none in English for after 1993. There are several careful studies of poverty which are available in Persian (e.g., Pajouyan [27] and Tabibian [38]), but, though they all use the same data, they employ different methods of measuring poverty and sometimes reach different conclusions.…”

“…As a result, widely varying poverty rates quoted inside and outside Iran have led to confusion and inhibited the development of a productive public debate in Iran. 5 The plan of the paper is as follows: The next section discusses the trends in national output per head and in personal incomes and expenditures, showing that the standard of living has on average been restored to its pre-Revolution level. This provides the context for understanding changes in poverty and inequality discussed in Sections 4 and 5, which discuss, respectively, the trends in poverty and inequality.…”

Iran’s Multi-ethnic Mosaic: A 23-Year Perspective

“…But very little has been done on horizontal inequality. Assadzadeh and Paul (2004) examine the 2 changes in the extent of poverty in Iran between 1983 and 1993. They show that both rural and urban poverty increased in the first half of this period during the Iran-Iraq war, an economic recession, and fall of oil revenues, but they decreased after the war, in the reconstruction period.…”