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

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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
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:   (9241 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.
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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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