The effect of housing rent on consumption of durable and non-durable goods (Iranian urban households in selected provinces)

Document Type : Research Paper

Authors

1 PhD student in Financial Economics, Urmia University

2 Associate Professor of Economics, Kharazmi University

3 PhD student in Financial Economics, Yazd University

Abstract

Housing one of the most basic needs of any household, which accounts significant share of household expenditure.
The main purpose study is to investigate effect of housing rent on consumption of durable and non-durable goods of Iranian urban households. For this purpose, 24 selected provinces, according to the report of the Statistics Center of Iran, are divided into two low-income and high-income deciles (based on the coefficient of food consumer goods, higher coefficient is the low-income deciles of the society). result, in the period 2011-2020 by the dynamic panel method in two separate groups; The effect of housing rent on the consumption of durable and non-durable goods has been studied. The Sargan, Arlano, and Bond tests are also presented to evaluate suitability of the model and interpret results of the usage estimates and their results.
Estimated results show provinces with high income deciles have increased consumption of durable goods %1.32 and consumption of non-durable goods % 0.23 with increase in housing rents, and if consider durable goods as wealth; Renting housing for high-income deciles has increased wealth. On the other hand, low-income deciles have reduced consumption of durable goods -%4.57 and consumption of non-durable goods -%0.15 with increase cost of renting housing. Therefore, based on research findings, recommended that policy makers and the government do not ignore this gap in household consumption behavior, have more control the cost of housing rent so that the consumption basket of low-income households is not smaller and more limited for the benefit of high-income groups.

Keywords

Main Subjects

References

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Quarterly Journal of Applied Theories of Economics
Volume 8, Issue 3 - Serial Number 30
November 2021
Pages 217-242

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