Impact of Targeted Subsidies Implementation on Inequality in Iranian Rural Area (Case Study: Villages of Neishabour County)

Document Type : Original Article

Authors

• Majid Hamzehi
• Aliakbar Anabestani
• Jafar Javan

Ferdowsi University of Mashhad

10.22067/JRRP.V10I2.86000

Abstract

Purpose-The implementation of targeted subsidies policy in Iran is among the actions that, have been taken with the aim of reduction of poverty, reducing social class differences between different deciles of society and specially upgrading rural indicators in rural areas. The present study has been conducted with the purpose of evaluating the impacts of targeted subsidies on expansion of inequality in rural areas.
Design/methodology/approach -This fundamental-exploratory research has been done by descriptive-analytical method. The required data were collected through both field and documentary methods. In this study, first, the research indicators were investigated during two six-year courses before targeted subsidies (2005-2010) and after targeted subsidies (2011-2016) at the level of all villages in the country and the average of each indicator was compared between the two periods before and after targeted subsidies and then the obtained results of this part were compared with the results of field research in the study sample. In this study, 22 villages of Neishabour county were selected as a sample by systematic random method using Cochran's formula.
Finding- Findings of this study show that cash subsidies accounted for 7.56% of a household income portfolio in the case study in 2019. But the Gini coefficient in the period after targeted subsidies was higher than the period before the targeted subsidies, while the ratio of 10% 0f the wealthiest to 10% of the poorest population in the rural areas of the sample in 2018 was equal to 20.67. Also, despite the original goal of targeted subsidy plan, the lower deciles are far more pressured by rising energy prices, and household food expenditures are spent on food groups. However, the average caloric intake of each person in the tenth decile is seven times that of the first decile. Also, in 70% of the households of the first decile, there were no employed people. In general, the villages of the country have faced a worsening situation in seven indicators, both in the macro dimension and in a case study, but an improvement has been observed in case of one indicator.

Keywords

• Targeted subsidies
• Inequality in rural areas
• Structural Adjustment policies
• Neishabour
• Iran

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