Calculation and Investigating of the welfare weight of Iranian provinces during the period 2001-2019
Bu-Ali Sina University
Abstract: (163 Views)
Since the change in per capita consumption has a different effect on the welfare of each province, estimating its effect can play a significant role in policy and planning in each province. Therefore, this study tries to calculate the welfare weight of each province according to the elasticity of marginal utility of consumption during the period 2001-2019. The results of the estimation showed that the elasticity of marginal utility of consumption is approximately between zero and negative one, which indicates that the elasticity of marginal utility of consumption is low. Also, the average of this variable has decreased during the period, which indicates a decrease in government intervention and its implementation policies in reducing inequality and income distribution in lower-income provinces. Finally, the results of estimating the welfare weight show that different provinces have different welfare weights each year. Typically, provinces with lower per capita incomes have more welfare weights. The average welfare weight during the years 2001 to 2009 has gone through a stable trend and since 2010 its amount has increased. These changes have continued to fluctuate until 2019. This increase in welfare weight has been greater in recent years, one of the main reasons for which could be the fluctuations of macroeconomic variables due to economic sanctions.
Keywords: Welfare weight, Social welfare function, Elasticity of marginal utility of consumption, Provincial study, Inequality
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