Volume 15, Issue 3 (2015)                   QJER 2015, 15(3): 23-37 | Back to browse issues page

‎ 20.1001.1.17356768.1394.15.3.3.3

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Mortazavi S A, Pirooz R, Mahmoodgordi R. The Effect of Increasing Milk Prices on the Net Welfare of Income Deciles of Urban Groups in Iran. QJER 2015; 15 (3) :23-37
URL: http://ecor.modares.ac.ir/article-18-1112-en.html
The Effect of Increasing Milk Prices on the Net Welfare of Income Deciles of Urban Groups in Iran
Seyed Abolghasem Mortazavi * 1, Rosa Pirooz2 , Rahim Mahmoodgordi3
1- Assistant Professor of Agricultural Economics, Tarbiat Modares University, (E-mail: samortazavi@modares.ac.ir) Corresponding Author
2- MSc. of Agricultural Economics, Tarbiat Modares University, (E-mail: Rosa.pirooz@yahoo.com)
3- Ph.D. Candidate of Agricultural Economics, Tarbiat Modares University, (E-mail: rgordi61@gmail.com
Abstract:   (9400 Views)
The price fluctuations due to adjustments to Iran's national milk pricing policy affect households’ welfare. This study examines the effect of milk price increases on the welfare of urban income groups using time series data during 1982-2009. The relationships among per capita demand for milk, average milk price and disposable per capita income were estimated for five income groups using Autoregressive Distributed Lags (ARDL) model. The results indicate that compensating variation and welfare are downside, this means that elimination of milk subsidies results in more welfare fluctuations in low income groups than that of high income ones. Therefore, it is difficult for groups at lower income levels to compensate for losses. If the government divides the cost of lost subsidies equally among households, financial losses resulting from price increases cannot be compensated for two groups, but higher income groups will benefit most from redistribution policy.
Keywords: Subsidy, Milk Price, Compensating variation, Net consumer welfare, Income Groups
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Article Type: Research Paper | Subject: D12 - Consumer Economics: Empirical Analysis|D6 - Welfare Economics
Received: 2013/01/10 | Accepted: 2013/10/30 | Published: 2015/10/23
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