---

Withdrawing energy subsidies has inevitably welfare effects on the Iranian economy. The estimation of this effect can help policy-makers and planners to take the right decisions. In this paper, welfare effects of cash transfer are calculated for electrical energy subsidies using a social accounting matrix and the computable general equilibrium model. In order to evaluate the welfare effect of this policy, GDP index has also been implemented. Three scenarios of prices, cash payment of subsidies and model simulation are considered in this regard. The research findings reveal that as a result of these policies, GDP will dramatically decrease and the economy will fall into a recession. If the cash payments are financed through the following three methods; a) surplus government revenues, b) sales tax on electricity commodity, c) income tax, combined with price increasing policy, will cause a deeper recession and a lower rate of GDP as a result. This trend has a negative and reverse relation with the amount of cash payment subsidies and electrical energy price. Also, the rate of change will heavily depend on the sort of financial resources for such subsidies, as with an increase in cash subsidies and electricity prices, the result would be decreased level of GDP over time.

---

In this paper the impacts of oil price fluctuations on the household welfare for different income groups have been studied using computational general equilibrium model. Equivalent Variation (EV) criterion is also used to evaluate changes in household welfare. The results show that oil price fluctuation has a greater impact on income, expenditure and welfare of urban households compared with the rural ones. In other words, dependence of urban household income on oil price is stronger in comparison to the rural ones. It has also been revealed that an oil price increase is more effective than the price reduction on household welfare, income and expenditure.  Ratio of EV to total expenditure is almost the same for the poor and rich households, implying that both of them suffer a percentage of welfare loss in the same way.

---

This study investigates alternative options for allocating incomes from targeting subsidy program to different production sectors and its consequences on income distribution among Iranian households. This research is performed by computing income multipliers derived from social accounting matrix for three income groups in urban as well as rural households and allocating income to different production sectors accordingly. Results indicate that allocating income based on income multiplier of the rural high income households leads to a reduction in income inequality between rural and urban households and generates the highest absolute income for all income groups. The only drawback of this option is that it raises the income gap among different income groups in rural as well as urban regions to some extent. In addition, results reveals that in order to reach the objective of reducing income inequality, the two agricultural subsectors, cropping and horticulture production sectors, and food industries can play important role and should be given special attention in allocating income to these sectors.