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The measurement of multidimensional poverty in 22 districts of Tehran is the main goal of this research. Studying human deprivation regarding basic needs i.e. health, nutrition, education and political freedom seems essential due to existing shortcomings of income-based poverty measurement approach. Here, we measure multidimensional poverty in terms of four attributes (income, housing, education and public health) using information theory approach developed by Maasoumi and Logo(2006) model. First, we calculate single-dimensional poverty based on each attribute. Then, according to difference in levels of substitutability among attributes we measure the absolute poverty using aggregate poverty line approach. The results show that the poorest districts of Tehran are district 19 in terms of income approach and districts 19 and 17 in terms of education and housing, respectively. The worst situation regarding public health belongs to district 16. The highest and the lowest multidimensional poverty rate were observed in districts 4 and 1 respectively. Furthermore, if substitution coefficient among attributes increases, then the multidimensional poverty rate will decrease. About 63 percent of Tehran population is of relative deprivation.

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The high cost of health care services indicates that the households are mainly responsible for the financial burden of their treatment rather than health insurance companies, and the policy holders often bear the catastrophic expenditure that might drive them below the poverty line. According to the Fourth development plan Act of Islamic Republic of Iran, Out of Pocket Payment (OOP) of households should not exceed 30% of their total health expenditure. This study uses household micro data provided by income-expenditures household survey in order to consider the impact of health care expenditure on the households’ poverty. The findings show that increases in the health care expenditure have led poverty to increase from 1 to 4 percent in different urban and rural areas during the period of study. According to our calculation, if OOP decreases to 30 % of total health care expenditure, then the share of population under poverty line will decrease to 2% of whole population.