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Direct Distribution of Rents and the Resource Curse in Iran: A Micro-econometric Analysis

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  • Mohammad Reza Farzanegan
  • Mohammad Habibpour

Abstract

Our goal is to examine the income inequality and welfare effects of the direct distribution of resource rents and subsequent taxation in Iran. We use rich micro survey data covering more than 36,000 Iranian households in 2009. Our micro-simulations show that the direct distribution of resource rents among all citizens and the imposition of an additional direct income tax have a significant negative effect on the household GINI index and on poverty. We also examine three alternative policies to the resource dividend (RD) policy. The results show that the RD policy is the most successful policy for addressing rents-induced inequality.

Suggested Citation

  • Mohammad Reza Farzanegan & Mohammad Habibpour, 2014. "Direct Distribution of Rents and the Resource Curse in Iran: A Micro-econometric Analysis," CESifo Working Paper Series 4824, CESifo.
    • Handle: RePEc:ces:ceswps:_4824
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    More about this item

    Keywords

    resource curse; direct rents distribution; poverty; inequality; household survey; Iran;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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