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Poverty Changes during the Three Recent Development Plans in Iran (1995-2007)

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The purpose of this study is to analyse the degree of poverty in Iran and how it changed over time during the second, third and fourth (first three years) five-year national development plans (1995-2007). It does this by documenting overall poverty levels and poverty within regional subgroups, using the micro-level data set of household expenditure survey conducted by the Statistical Centre of Iran (SCI) in 1995, 1999, 2004 and 2007. I have found an increase in all poverty measures in rural regions and a decrease in urban areas during the second development plan (1995-1999). The country as a whole also experienced a considerable poverty reduction over the third development plan (1999-2004) under Khatami’s presidency. However, all poverty measures suggest that during Ahmadinejad Administration (2004-2007) poverty has risen. This paper also examines the distribution of poverty breakdown by the regional status of households in Iran. The incidence, intensity and severity of poverty are higher in rural than urban areas in Iran. Regional decompositions show that although poverty was spread throughout the country, the intensity of poverty in some provinces such as Systan-Balochestan, Kermanshah, Kordestan, Hamadan and Ilam was more pronounced. The results also suggest that the contribution of the “southeast” and “west” regions (including above mentioned provinces) to the national poverty were increased during the second, third and fourth plans. This might be attributed to the fact that these provinces were more affected by eight-year long Iran-Iraq war, immigration of refuges from neighbours countries and drought.


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Affiliations: 1: Department of Finance, University of Tehran Department of Economics, University of California Riverside 3109 Sproul Hall Riverside, CA 92521 USA, Email:


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