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Household data are used in this study to assess the transaction costs of obtaining credit from formal and semiformal institutions in rural Iran. A survey was employed to gather the data needed to determine the transaction costs that must be borne by the borrower in each step of the credit procurement process. Data were collected from a random sample of 459 households, including 272 borrower households. OLS regression and F-test (in view of the authors, OLS is not regression but a method of estimating a regression. F-test is not an econometric method but perhaps a statistical one and still it is a key statistics toll of either ANOVA or a regression. So these cannot be employed to investigate something. On the other hand, regressions have been estimated below, and surely one should be able to assign names of them) were employed to analyse the transaction cost factors affecting the procurement of credit facilities. Similar to many financial institutions operating in other developing countries, access to a loan in Iran imposes high transaction costs upon mostly poor rural households. The results reveal that the transaction costs of receiving a loan are on the average equivalent to nine percent of the total loan size. Formal and semiformal institutions impose significantly different costs upon the rural loan applicants. Results reveal that contractual form, loan size, how far the borrower being away from the financial centre along with other borrower peculiarities are important determinants of transactions’ costs.

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Production costs include transformation and transaction costs. Transformation costs are expenses of physical production. Transaction costs include the costs of measuring physical properties and legal characteristics of goods exchanged, and the costs of assurance and implementation of contracts, which neoclassical economics ignores them. Transaction costs play important roles in the economic performance because the accumulation of knowledge, specialization, and division of labor and trade boom is an inverse function of the transaction costs per capita. Transaction costs are of different instances. In the Iranian business sector, business goodwill is the most important type of transaction costs. This study aims to estimate the cost of Goodwill of retail businesses in Kermanshah. This research makes use of institutional economics approach to estimate the cost of goodwill. Data are gathered from a sample of 50 retail units through interviews. The results indicate that total annual cost of goodwill of the retail units amounts to 3014 billion Rials in 2012. Each retail unit bears more than 15 million Rials as average monthly cost-of-goodwill. The value of goodwill capital of retail businesses is estimated about 45,679 billion Rials, equivalent to 53% of the total investments made in Kermanshah in 2012. The findings can be used to amend the capital structure and to increase the share of productive capital.