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Impact of socio-economic infrastructure investments on income inequality in Iran

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  • Zolfaghari, Mehdi
  • Kabiri, Mahbobe
  • Saadatmanesh, Hamideh

Abstract

One of the main subjects, governments have been facing is fair distribution of income, and making effort to improve it. In this study, we evaluated the effects of economic (energy, water, ICT) and social (health, education) infrastructure expenses on income inequality in the Iranian provinces for the period of 2007–2016 by the panel corrected standard errors (PCSE) model. The results show that social and economic infrastructures improvements reduce income inequality. However, the magnitude of these effects varies. Investment on education, healthcare, communication technology, energy, and water infrastructures has the greatest impact on income inequality reduction, respectively. Therefore, in order to reduce inequality in deprived areas, combination and optimal allocation of economic and social infrastructures should be considered.

Suggested Citation

  • Zolfaghari, Mehdi & Kabiri, Mahbobe & Saadatmanesh, Hamideh, 2020. "Impact of socio-economic infrastructure investments on income inequality in Iran," Journal of Policy Modeling, Elsevier, vol. 42(5), pages 1146-1168.
    • Handle: RePEc:eee:jpolmo:v:42:y:2020:i:5:p:1146-1168
    DOI: 10.1016/j.jpolmod.2020.02.004
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    More about this item

    Keywords

    Economic and social infrastructure; Income inequality; Panel corrected standard errors;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I0 - Health, Education, and Welfare - - General
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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