Abbas Arabmazar; Hesameddin Ghasemei
Volume 19, Issue 60 , October 2014, , Pages 133-156
Abstract
This paper investigates the factors affecting Iran’s non-oil export using the Bayesian model framework approach. With the estimation of over 9,600,000 regressions and using Bayesian model averaging in the framework of uncertainty model, six variables of exchange rate, gross domestic product, inflation, ...
Read More
This paper investigates the factors affecting Iran’s non-oil export using the Bayesian model framework approach. With the estimation of over 9,600,000 regressions and using Bayesian model averaging in the framework of uncertainty model, six variables of exchange rate, gross domestic product, inflation, private sector investment, banking facilities to the industry and mining sector and instability of exchange rate were identified (i.e., they maintained their effects in presence of other variables and were significant). This indicates that we should pay more attention to these variables than others in estimation of a non oil export model
Mohammadnabi Shahekitash; Nasim Fiyozi Ekhtiyari
Volume 13, Issue 38 , April 2009, , Pages 133-155
Abstract
"Competition" and "monopoly" are two important issues in market structure analysis. Theoretically, monopoly structure in an industry results in distorted resource allocation, bringing about economic rents. The outcome of such market structure is the burden of social costs imposed on the users. This study ...
Read More
"Competition" and "monopoly" are two important issues in market structure analysis. Theoretically, monopoly structure in an industry results in distorted resource allocation, bringing about economic rents. The outcome of such market structure is the burden of social costs imposed on the users. This study shows that the insurance industry in Iran is a tight monopoly. We therefore, estimate the resulting social burden of insurance industry in Iran. The result of calculating Harberger, Posner, and Cowling-Muller indices in 2003 shows that a social cost is equal to 2.8%, 3.45%, and 3.13%. of the revenues earned in insurance industry, respectively.
Seyed Nezamuddin Makiyan; Mojtaba Rostami; Davood Farhadi; Mohammad Amin Zabol
Abstract
Many empirical studies have analyzed the relationship between economic and social behavior. Unemployment is considered as a phenomenon which is not desirable. The effect of unemployment on crime, may have heterogeneous impact on distinct regions (province or country). The technical approach in econometric ...
Read More
Many empirical studies have analyzed the relationship between economic and social behavior. Unemployment is considered as a phenomenon which is not desirable. The effect of unemployment on crime, may have heterogeneous impact on distinct regions (province or country). The technical approach in econometric literature indicates that, due to high integration of economic and social activities, the independency assumption-in this study, provinces- in the sample cannot be accepted, especially if the sample is small. In order to show the difference of crime effect on unemployment rate in various provinces, the random coefficients Panel Bayesian Conjugate Poisson model (Hierarchical) is used. To do this, the data of five provinces of Iran are used during the period of 2009-2014 to demonstrate such heterogeneous effects. Results show that for an increase in unemployment, there is a positive and varying effects on crime in the provinces for which the data were collected. In other words, in this study, for a %1 increase in unemployment, the greatest impact is in Tehran and the lowest is in Semnan province.
Hamidreza Navvabpour; Ali Reza Khoshgoyanfard; Mohammad Taheri Monazah
Volume 4, Issue 11 , July 2002, , Pages 139-156
Abstract
Due to budget and time constraints, the National Statistical Organizations usually design their surveys and optimize the size of samples at a larger geographical level e.g. the national level. This causes the economic researchers, planners, and decision-makers not to have access to their required data ...
Read More
Due to budget and time constraints, the National Statistical Organizations usually design their surveys and optimize the size of samples at a larger geographical level e.g. the national level. This causes the economic researchers, planners, and decision-makers not to have access to their required data at the smaller geographical levels or in terms of some specific characteristics.In order to meet their statistical needs, the data users have resorted to the other agencies producing statistics which design their surveys and optimize size of samples at a smaller geographical level such as Ostan (province). Unfortunately this could impose a heavy cost on the country's budget, lengthen the process of data collection and dissemination and bring about the non-sampling errors with a higher proportion in the process. This paper, introducing some Small Area Estimation (SAE) methods, attempts to recommend an appropriate method, for estimating unemployment rates at the provincial level.
Zahra Kahrizi; aziz maraseli; heshmatollah asgari
Abstract
Iran's provinces have experienced high inflationary pressures over the past few decades. This paper models the dynamics of inflation in terms of spatial effects between Iranian provinces using the hybrid Phillips New Keynesian Curve during the period (1392-1380). The results show that, the Phillips Keynesian ...
Read More
Iran's provinces have experienced high inflationary pressures over the past few decades. This paper models the dynamics of inflation in terms of spatial effects between Iranian provinces using the hybrid Phillips New Keynesian Curve during the period (1392-1380). The results show that, the Phillips Keynesian curve is suitable for investigating the dynamics of inflation in Iran's provinces. Findings indicate that provinces focus on setting prices of their goods based on a combination of forward looking and backward looking rules, and that forward looking behaviors will have a stronger effect on the rate of inflation in the current period. Also in each province ,the output gap as representative of the actual variables has an effect on the inflation rate of its current period. Finally, considering the significance of spatial auto-correlation between Iran's provinces, output gap, expected and lagged inflation rates in adjacent provinces have negative effects on the current inflation rate of the neighboring provinces.
jalal molabeigi
Abstract
An important feature in market design is the stability of allocations since the created allocations, even if duly formed, may collapse when they are not stable. In other words, when suppliers and demanders meet via a mechanism that is not stable, some elements may egress the mechanism. Therefore, stability ...
Read More
An important feature in market design is the stability of allocations since the created allocations, even if duly formed, may collapse when they are not stable. In other words, when suppliers and demanders meet via a mechanism that is not stable, some elements may egress the mechanism. Therefore, stability is the key issue in matching agents. Stable allocation is a situation whereby no coalition can cleaves to improve the member conditions. Kidney market is such a market that needs to be revived by designers. In the present study, the data are collected from 20 dialysis patients and 20 kidney donors to study stable allocations. Shapely value approach is used to examine stable allocations. The results showed that collaborations among patients led to the creation of two three-way coalitions worth 930 and 880 M IRR, two two-way coalitions worth 610 and 530 M IRR, and one chain coalition worth 660 M IRR. Since the shapely value obtained from patient collaborations is stable, all coalitions of the present study enjoy stability feature. The results reveal that market design in kidney exchange increases the number of efficient transplants from 4 to 17 pairs in the research sample. Besides, the patient and donors with the same blood types may not need to participate in the mechanism.
Zahra Mosayyebi; Nooraddin Sharify
Abstract
Developing countries are faced with the scarcity of resources such as labor force, investment, energy, water, etc. Such scarcities have forced these countries into adopting the unbalanced growth theory and prioritizing their resources in the manufacturing sectors. In this study, the importance of the ...
Read More
Developing countries are faced with the scarcity of resources such as labor force, investment, energy, water, etc. Such scarcities have forced these countries into adopting the unbalanced growth theory and prioritizing their resources in the manufacturing sectors. In this study, the importance of the banking sector in Iranian economy, as well as its effects on other economic sectors are taken into account. Total forward Linkages (Net and Gross) are used in order to specify the influence of the banking sector on other sectors, and also to compare it with them. The stimulation of the development of banking sector activities on the various economic sectors is also specified through total backward linkages (Net and Gross). The statistical data of this study have been provided from the input-output table (2012); the latest official updated input-output table of Iran, released by Iran’s Parliament Research Center. The position of this sector, both in terms of stimulatibility and stimulation in the manufacturing sectors, is lower than that of other sectors. The partial forward linkage index of the banking sector shows that 67.93% of the banking services are used as intermediate goods in the economy. Thus, the banking sector is the one which that is mostly at the service of the production sectors, and in this regard, it is ranked first among all service sectors. The chemical production, building and banking sectors respectively obtain the most benefits from banking services. The chemical production sector, the banking sector and the water, electricity and the natural gas distribution sectors, respectively, are the largest suppliers of the banking sector’s needs.
Macroeconomics
Sohail Rudari; Seyyed Hadi Arabi; Sanaz Rahimi Kahkashi
Abstract
The present study aimed to examine the transfer, reception, and the spillover of volatility from March 1982 to September 2022, using the time-varying parameter vector autoregression model based on Barunik-Krehlik (TV-VAR-BK) with monthly frequency. The results indicated that the primary relationship ...
Read More
The present study aimed to examine the transfer, reception, and the spillover of volatility from March 1982 to September 2022, using the time-varying parameter vector autoregression model based on Barunik-Krehlik (TV-VAR-BK) with monthly frequency. The results indicated that the primary relationship among the volatility of the analyzed variables is of long-term nature, with the exchange rate emerging as the dominant factor in explaining the volatility of the examined network. In the short term, liquidity serves as the primary transmitter of volatility to inflation and the exchange rate. However, in the medium and long term, the exchange rate becomes the primary transmitter of volatility to inflation, while liquidity acts as the net receiver of currency volatility. Additionally, the long-term impact of the exchange rate is more pronounced. Failure to control currency volatility can lead to inflation turbulence by transferring volatility to liquidity, underscoring the significance of exchange rate stability in managing liquidity and inflation.IntroductionThe exchange rate is one of the key factors influencing inflation. In addressing the impact of exchange rate volatility, the status of inflation plays a crucial role (Tahsili, 2022). Moreover, assessing the factors influencing the exchange rate stands as one of the most challenging empirical problems in macroeconomics (Williamson, 1994). Since the exchange rate is significant economic indicator in any country, alterations in monetary variables (e.g., liquidity and inflation rates) as well as non-monetary variables can lead to fluctuations and instability in the exchange rate (Amrollahi et al., 2021). The causality of volatility between money and inflation can vary depending on economic conditions (Al-Tajaee, 2019). A deeper understanding of liquidity growth dynamics, inflation, and exchange rates in Iran elucidates the reasons behind high inflation, rapid and continuous liquidity growth, and the impact of exchange rate volatility. Extreme changes in each variable overshadow the others, indicating a complex relationship among exchange rates, inflation, and liquidity. Examining the relationship between the volatility of different assets unveils the phenomenon of volatility spillover, where fluctuations in one component trigger volatility in others. An additional crucial aspect is understanding the modes of transmission, reception, and intensity of the causal relationship among exchange rates, inflation, and liquidity in Iran during different periods. In different years, the mutual influence of these components may have varied based on political, economic conditions, health, and pandemic issues, each of which impacting decision-making concerning exchange rates, inflation, and liquidity as three vital macro-economic components. In this respect, the present study used the time-varying parameter vector autoregression model based on Barunik-Krehlik (TV-VAR-BK) with monthly frequency in order to examine volatility spillover from March 1982 to September 2022 in Iran, providing a new perspective on investigating causality by analyzing the time-frequency volatility among exchange rates, inflation, and liquidity.Materials and MethodsThis study is applied and analytical in terms of its purpose and research method, respectively. The data was sourced from the Economic Accounts Department and the National Accounts of the Central Bank. The TVP-VAR-BK model was employed to analyze the time series among exchange rates, inflation, and liquidity. The TVP-VAR-BK model helped analyze the transmission and reception of volatility of variables across different periods (short-term, medium-term, and long-term). Furthermore, the analysis delved into whether the variables acted as net receivers or net transmitters of volatility.Results and DiscussionThe results showed that, in the short term, liquidity exerted the most significant influence and transmitted volatility to other variables. Notably, the most substantial impact and transmission of volatility by the liquidity occurred in 2013, following the tightening of sanctions on Iran. In the medium and long term, the exchange rate emerged as the most influential factor on other research variables.Examining the causal relationship in the short term, a strong causal connection was identified from liquidity volatility to inflation and the exchange rate. However, no causal relationship was observed between inflation and the exchange rate in the short term. Therefore, in the short term, liquidity could be the primary cause of volatility in inflation and the exchange rate. Failure to control short-term liquidity volatility could lead to severe volatility directly and indirectly within the studied network.Moving to the medium term, the transfer of volatility was predominantly from the exchange rate to liquidity and, to a lesser extent, from liquidity to inflation. In the medium term, the transfer of volatility from the exchange rate to inflation was less pronounced. This suggests that fluctuations in the exchange rate strongly transfer volatility to liquidity in the medium term, and liquidity significantly contributes to the emergence of inflation volatility. The exchange rate, albeit to a minor extent, can directly contribute to the transfer of volatility to inflation. This underscores the dominant role of the exchange rate in the network during the medium term.In the long term, no causal relationship between liquidity and inflation was observed, and there was no causality in the transfer of volatility between inflation and the exchange rate. This implies that factors other than the investigated network can explain inflation volatility in the long term. Although there is causality in the transfer of volatility from the exchange rate to liquidity in the short- and medium-term periods, this causality is stronger in the long term. Hence, while the classical view on liquidity and inflation holds until the medium term, the post-Keynesian view becomes evident in the long term. Overall, the exchange rate stands out as the dominant factor in the investigated network. Without stability in the exchange rate, Iran’s economy shall anticipate the fluctuating growth of liquidity and inflation in the short- and medium-term periods.ConclusionThe primary relationship among the volatility of the examined variables proved to be long-term, with the exchange rate emerging as the dominant factor explaining the volatility within the investigated network. In the short term, liquidity functioned as the net transmitter of volatility to inflation and the exchange rate. However, in the medium and long term, the exchange rate takes on the role of the primary transmitter of volatility, while inflation and liquidity assume the positions of net receivers of currency volatility. Moreover, the impact of the exchange rate was found to be notably stronger. Should exchange rate volatility remain uncontrolled, it has the potential to induce inflation volatility by transferring it to liquidity. This underscores the critical importance of maintaining exchange rate stability for the effective control of liquidity and inflation.
Hadi Rafiee Darani; Naser Shahnooshi
Volume 19, Issue 58 , April 2014, , Pages 153-181
Abstract
The main objective of this paper is to study the effect of government size and good governance on human development in different countries in 2000, 2005 and 2010. For this purpose, geographical weighted regression (adaptive spatial kernels) was used for data analysis considering significance of Moran ...
Read More
The main objective of this paper is to study the effect of government size and good governance on human development in different countries in 2000, 2005 and 2010. For this purpose, geographical weighted regression (adaptive spatial kernels) was used for data analysis considering significance of Moran statistic and spatial correlation of Human Development Index. Results (obtained utilizing ArcGis 9.3 software) indicate that on average, government size and good governance have an overall positive impact on human development index. Specifically, the effect of government size shows a decline between 2000, 2005 and 2010, whereas, the effect of good governance shows an increase from 2000 to 2005 and a decline from 2005 to 2010 respectively. In the case of Iran, findings indicate that regional impact coefficient of government size is positive in 2000 and 2005, while it is negative in 2010. The effect of good governance in Iran is positive with an increase in effect intensity. We also analyzed the effects of government size and good governance specifically on four groups of countries in terms of the level of development.
Welfare, poverty and income distribution
Fatemeh Bazzazan
Abstract
Poverty is a global issue of high importance for both developing and developed countries. The first step in tackling poverty is to identify the impact of economic policies on poverty indicators. In this direction, the purpose of this study is to measure the effect of foreign tourism development on poverty ...
Read More
Poverty is a global issue of high importance for both developing and developed countries. The first step in tackling poverty is to identify the impact of economic policies on poverty indicators. In this direction, the purpose of this study is to measure the effect of foreign tourism development on poverty reduction using SAM fixed price multiplier approach. For this purpose, 2011 SAM, 2018 foreign tourist receipts, and three poverty indicators: head count ratio, poverty gap, and (FGT) have been considered. The results indicate that the arrival of foreign tourists through the production growth channel reduces poverty in Iran and reducing poverty of rural households is greater than urban households. Results also show that the highest share in sectoral poverty reduction based on the three poverty indicators is related to the agricultural sector (based on the census poverty index), hotels and restaurants, and manufacturing, and transportation (based on the poverty gap index and the FGT indices). Whereas the least reduction in poverty occurs in the financial, insurance and education activities. Any policy making in the direction of tourism development is considered as a suitable socio-economic achievement.
Financial Economics
Nazanin Ghasemdokht; Hamideh Razavi
Abstract
Overdue claims resulting from the lending process can pose a significant credit risk to financial institutions. To mitigate this risk, institutions often acquire guarantees. However, borrowers may encounter challenges when providing adequate and valid guarantees, particularly guarantees with lower risk. ...
Read More
Overdue claims resulting from the lending process can pose a significant credit risk to financial institutions. To mitigate this risk, institutions often acquire guarantees. However, borrowers may encounter challenges when providing adequate and valid guarantees, particularly guarantees with lower risk. The present research focused on loan credit risk, borrower utility, and liquidity risk of guarantees within a private fund. First, data mining and classification methods were applied to a dataset of loans. The random forest algorithm, with a prediction accuracy of 0.986, was found to be optimal for constructing a guarantees composition model. The guarantees composition involves using multiple types of guarantees to secure a loan. Two models were established to generate guarantee compositions with a maximum default rate of 10%. In testing scenarios, the average risk of total default for acceptable combinations stands at 3.94%, a significant improvement compared to the fund loans’ overall default rate of 6.3%. Furthermore, the proposed model increases borrower utility from 4.22 to 4.6, not only reducing the default rate but also enhancing borrower utility.IntroductionWhen providing loans to customers, banks require guarantees due to insufficient knowledge of customers and the default risk. Obtaining guarantees from borrowers is recognized as a solution to reduce default risk in banks, but its impact on risk reduction depends on various factors. The combination and type of guarantees are among these factors, which have received less attention in the literature.The current state of overdue bank claims in Iran is unfavorable, and if conditions persist, it will lead to significant monetary and financial crises with negative effects on various sectors of the economy. In recent years, the ratio of non-performing loans to total disbursed facilities in Iran has been consistently higher, averaging around 5% to 10% higher than the global average. Reduction of the default risk in loans can decrease the ratio of non-performing loans to total disbursed facilities.The present study first intended to create various combinations of guarantees for each loan, followed by predicting the probability of default for each combination. In line with their priorities, borrowers can then select their desired guarantee composition from a list of acceptable combinations.MethodologyTo address the research problem, the study identified common classification methods in data mining by relying on published articles in the field of credit risk. Then, a sample dataset of loans from a financial institution was examined, and the data mining process based on classification methods was applied to the dataset. The random forest method, with a prediction accuracy of 0.986, was ultimately chosen as the approach for constructing the guarantee composition model. Using the previous guarantee compositions, the study developed two models by relying on machine learning techniques. These compositions take into account the perspectives of both the financial institution and the borrower.Final ResultThe two models generate guarantee compositions with a maximum acceptable default rate of 10%. Considering their own priorities circumstances, borrowers can select their desired guarantee composition from the available combinations, which contributes to a reduction in the default rate in the financial institution.
Yaghoub Andayesh; Seyed Kamal Sadeghi; Zahra Karimi Takanlou; Mohammad Ali Motafakker Azad; Hossein Asgharpour
Abstract
Considering its biological situation, each country has a specific carrying capacities to absorb pollutants. Increased production, population, and direct and indirect fossil energy consumption have increased emissions such as carbon dioxide, resulting in destructive effects on the environment such as ...
Read More
Considering its biological situation, each country has a specific carrying capacities to absorb pollutants. Increased production, population, and direct and indirect fossil energy consumption have increased emissions such as carbon dioxide, resulting in destructive effects on the environment such as imbalanced greenhouse gases, global warming, climate changes, and endangering of humans’ and other creatures’ lives. The extent and dimension of the mentioned effects can vary depending on the consumption modus and technique practiced by households and industries. Ecological carbon footprint is a criterion to measure the humans’ impact on carbon emissions. In an attempt to measure the carbon footprint of households, this research seeks to answer the following questions: How much is the carbon footprint of urban and rural household deciles? What deciles create higher carbon footprints? What is the share of households in the country’s total carbon footprint? How big is the carbon footprint per capita in each decile? For this purpose, the Social Accounting Matrix of the year 2011 is used. The empirical results indicate that in 2011, the total net direct and indirect carbon footprint in Iran was 517 million tons, in which the household consumption accounts for 64% and the remaining 36% belongs to the government’s final consumption, export and others. Moreover, carbon footprint of urban households is more than the rural ones and it is elevated in higher income deciles. Carbon footprint of the tenth urban decile is 11 times greater than the first one. For rural deciles, this ratio is 9. Furthermore, carbon footprint of the tenth urban decile is 4 times greater than that of the tenth rural one. An Iranian’s household carbon footprint per capita was found to be about 4429 kg in 2012. Carbon foot print per capita in the first urban decile, the tenth urban decile, first rural decile, and the tenth rural decile is 1,124, 17,134, 965 and 9,803 kg, respectively. The results indicate that people with higher incomes have a greater carbon footprint.
Behavioral economics
Mohammad Amin Zandi
Abstract
The precise measurement of individual time preferences in assessing the economic plans that individuals are involved in, in the estimation of social time preferences, in the assessment of environmental and health plans is very crucial. The purpose of this research is to estimate and also describe the ...
Read More
The precise measurement of individual time preferences in assessing the economic plans that individuals are involved in, in the estimation of social time preferences, in the assessment of environmental and health plans is very crucial. The purpose of this research is to estimate and also describe the method of estimating individual intertemporal preferences. The sample is 70 students of Allameh Tabataba'i (A.S) and Payam Noor Universities. For this purpose, the experimental method, which allows controlling the confounding variables, is used. In order to estimate the discount function among various functions, the hyperbolic function had a better fit on the data. In this type of function, the discount does not take place at a fixed rate, but with the extension of the selection period, the discount decreases. The fitting of data using the hyperbolic function showed that this kind of discounting is consistent with past research. The average individual discount rate obtained was 0.0615 with a standard deviation of 0.796.1.IntroductionDecisions with varying consequences across different time periods are referred to as intertemporal choices. The scope of these decision types is extensive in human life, encompassing economic considerations like saving for retirement, investing in stocks, choosing between mortgage and renting, buying insurance, planning for student loan repayments, initiating a business, budgeting, planning for financial issues, buying energy-efficient equipment, purchasing a car, planning for estate, and deciding on the retirement withdrawal strategy. Moreover, decisions extend to non-economic realms, including investing in education, practicing delayed gratification in daily life, making choices regarding health and wellness, selecting a career path, deciding on healthcare options, engaging in environmental protection, and establishing education budgets for children. In essence, a myriad of intertemporal decisions shape the course of an individual’s life.In Samuelson’s framework for intertemporal choices, the total utility is determined as the weighted sum of utility across each time period. (1) The weight in each period is determined by the discount function. (2) represents the total utility from the perspective of the current period (i.e., t). T is the final period of life. signifies the instantaneous utility in the period t+k. is the discount function. k denotes the time delay from the present moment, and ρ is the instantaneous discount rate reflecting time preferences. The discount function, as incorporated in this model, takes the form of an exponential function. When computing the growth rate of the discount function, we have: (3) The growth rate of the discount function is independent of the delay in receiving goods (or rewards) postponed from the present time (i.e., k). This implies that altering the delay period for receiving delayed goods does not lead to a change in a person’s intertemporal preferences. For instance, if an individual favors receiving one apple today over receiving two apples tomorrow, this preference should extend to preferring one apple in one year over receiving two apples in one year and one day. This is the example introduced by Strotz (1955) to illustrate temporal consistency.Experimental research based on the discounted utility model has highlighted its limitations. First, extensive studies indicate that the discount rate tends to decrease as the delay in receiving the reward increases (Chapman, 1996; Heller & Pender, 1996; Redelmeier, 1993; Thaler, 1981). In other words, the growth rate of the discount function should also be contingent on the delay in receiving the goods (or reward). The second observed shortcoming in these investigations is termed inverse utility. This occurs when an individual prefers $1000 today to $1100 tomorrow but favors $1100 one year and one day later over $1000 one year later. Consequently, the behaviors noted in these studies lack time consistency. Additional research has identified instances of reverse preferences in individuals (Elster, 1979; Laibson, 1997; O'Donoghue & Rabin, 1999). The exponential discount function employed in the discounted utility model falls short in explaining such phenomena, as it conducts discounting at a fixed rate, irrespective of whether the delay in receiving the bonus increases or decreases.To address this issue, Mazur (1987) made modifications to the discount function originally proposed by Bam and Rachlin (1969) by incorporating k into the denominator. The adjustment resulted in a discount function that overcame the shortcomings of the exponential function. This hyperbolic function found extensive application in subsequent research and demonstrated a better alignment with the data acquired from experiments. The hyperbolic function is expressed as follows:(4) Here, k represents the discount rate, and D signifies the delay in receiving the reward from the present time. The discount rate in the hyperbolic discount function is given by: (5) In this rate, there is an inherent consideration for the delay in receiving goods (or rewards) from the present time. Consequently, the discount rate will undergo changes corresponding to alterations in this interval. This adjustment serves to rectify the deficiencies noted in this functional form.The findings of the meta-analysis on discount rates, encompassing both experimental and empirical methods, reveal that the variance of discount rates obtained from experimental approaches is lower than that observed in empirical methods. This discrepancy can be attributed to several factors. First, the limited availability of field data for determining time preferences contributes to the higher variance in empirical results. In addition, there is no available field data in which individuals make comparative choices. Third, the complexity arises from the numerous intervening variables influencing real-world data, making it challenging to isolate and analyze specific factors. The estimates obtained from experimental methods demonstrate greater predictability of intertemporal behaviors in the real world.Despite the significant importance of individual time preferences and the consistent data yielded by the experimental method, this approach has been underutilized for measuring individual time preferences in Iran. In this respect, the present research aimed to estimate and describe a methodology for calculating individual intertemporal preferences through the experimental method.2.Materials and MethodsThere are four experimental methods for measuring time preferences. The first method is the choice task, where subjects are prompted to select between a smaller reward in the present or near future and a larger reward in the distant future. Some studies implement this experiment using actual rewards, while others use hypothetical or non-financial rewards, such as a hypothetical job offer. The second method is known as matching tasks, in which subjects are asked to answer a question and fill in the blank. A common structure for this method is exemplified by questions like: 20,000 dollars now or … dollars one year later. Experiments use both real and hypothetical currencies. The third method is termed rating task. Here, subjects are exposed to the rewards provided at specific time intervals. They are tasked with rating the (un)attractiveness of these proposals. The fourth method is called pricing task, where subjects are requested to specify their willingness to pay for a hypothetical reward at a certain time (Feredrick et al., 2002).The present study used the method of choice task, and the task design was based on validated designs (Calluso et al., 2015a, 2015b, 2017, 2020). Each subject was exposed to a series of intertemporal choices, including receiving a fixed amount of money (14500 Tomans) immediately or a variable amount (22000, 36500, 44000, 59000, 66000, 80000, 88000 Tomans) across six time intervals (i.e., 7, 15, 30, 60, 90, and 180 days later). Consequently, the subjects were presented with 42 intertemporal choices, and each question was repeated 10 times. The subjects thus answered a total of 420 questions in a randomly distributed order. To determine the monetary values in intertemporal choices, the study converted the previously-researched valid monetary values into Iranian currency based on the purchasing power parity (PPP) index, utilizing the Central Bank data. The PPP index can be defined as the number of currency units a country needs to purchase the same quantity of goods and services in the domestic market that can be bought with US dollars.3.Results and DiscussionThe hyperbolic function, prevalent in most recent studies and previously discussed, was employed to estimate the discount rate. In this function, as the delay increases, the discount rate concurrently decreases. To obtain this rate for each tested individual, the research relied on conventional process from past research studies (Calluso et al., 2015a, 2015b, 2017, 2020; Iodice et al., 2017; Kable & Glimcher, 2007; Li et al., 2013). Concerning each delay period (7, 15, 30, 60, 90, and 180 days), a ratio of responses was obtained, where subjects expressed a preference for the future over the present, taking into account the delayed reward amounts. Subsequently, the Points of Subjective Equivalence (PSE) was calculated, representing the amount at which subjects chose an equal number of future and present options. To achieve this, the study estimated a logistic function that regressed the preference ratio of future-to-present responses on the reward amounts. Using this function, the research determined the amount equivalent to fifty percent of the frequency of the ratio of future-to-present preferences (i.e., PSE). Then the following formula was used to calculate the subjective value for each delay period: (6) The immediate reward was set at 14,500 Tomans. The subjective value was then normalized to the immediate reward. Subsequently, the discount rate for each subject was determined by fitting a hyperbolic function (Grossbard & Mazur, 1986; Laibson, 1997) to the relationship between the subjective value and the delay time in receiving the delayed reward.(7) Below is the scatter diagram depicting delays by day and the PSE for the aforementioned three subjects. Figure 1.The scatter diagram of delays by day and the PSE Source: Research resultsThe graphs illustrate that individuals with lower discount rates exhibit a lower PSE in delays, whereas those with higher discount rates demonstrate correspondingly higher PSE.Table 1 presents the results of estimating the individual discount rates for the three subjects.Table 1. Discount rate for the three subjectsR SquareSignificanceDiscount rateSubject0.8071significant0.0182patient0.7965significant0.0484average0.8028significant0.1173hastySource: Research results4.ConclusionThe estimation of the individual discount rate derived from this research confirmed the hyperbolic nature of the individual discount function, yielding a rate of 0.0615. In the evaluation of economic plans, the calculation involves determining the benefits and costs associated with the plan. A comparison of the benefits and costs is used to determine whether the plan is economical or not. Yet this proves challenging due to the presence of time preferences and the time value of money, the occurrence of benefits and costs at different points in times, and the varying weight of these factors in economic plans over time. Therefore, it seems less feasible to judge whether the plan is economical or not simply by adding benefits and costs.
Madjid Hatefi Madjumerd; gholamreza zamanian; Mohammad Nabi Shahiki Tash
Abstract
The present study aims to interpret equity premium puzzle based on the bubble risk approach in Iran’s securities market for the period 1996:09-2016:10. To this end, discovery of bubbles, estimation of the Epstein-Zin Preferences function, and interpretation of equity premium are examined. After ...
Read More
The present study aims to interpret equity premium puzzle based on the bubble risk approach in Iran’s securities market for the period 1996:09-2016:10. To this end, discovery of bubbles, estimation of the Epstein-Zin Preferences function, and interpretation of equity premium are examined. After that, RTADF tests are used to discover bubbles and date their stamping. Research results indicate that the securities market has experienced six bubble periods and has not had bubble in 65 percent of the period. In addition, the Epstein- Zin Preferences function of this study is estimated using GMM method. In this stage, estimation of elasticity of intertemporal substitution parameter is very important since it is expected that the risk of bubble is used to describe a part of stock market’s risk. Results of the study indicate that market bubbles have boosted risk factors in the securities market. In addition, economic factors in the securities market of Iran are substantially risk averse. Findings show that based on the traditional approach, a comprehensive interpretation of equity premium puzzle could not be presented; while the new approach can ascertain 90 percent of equity premium.
Welfare, poverty and income distribution
Bijan Baseri
Abstract
In this paper, attempts are made to empirically examine inequality in Iran which has hindered the government to achieve a balanced provincial socio-economic development. Income inequality affects economic growth sustainability through certain channels such as different saving rates of people, incentives ...
Read More
In this paper, attempts are made to empirically examine inequality in Iran which has hindered the government to achieve a balanced provincial socio-economic development. Income inequality affects economic growth sustainability through certain channels such as different saving rates of people, incentives to work hard, political instability and other factors as a whole. The effectiveness of government policies to address a balanced and an equitable development needs of each province depends mainly on quality of existing institutions, individual participation and their capabilities to contribute to development effort in each province. Inequality in provinces is partly due to regional inequality which in turn stems from unequitable provincial privilege to some resources, production specializations, the degree of centralization and unequitable budget allocation. In addition, the orientation and expenditure allocations mechanism pursued by government, if not rightly targeted, may affect spatial planning and economic growth which ultimately brings about inequality. In the present study, we examine how government policies have contributed (if any) to achieve the balanced growth objectives in order to decrease the existing provincial inequality gap. Based on Theil’s and Williamsons indices, we estimated inequality coefficient in Iran’s provinces for the period of 2000 to 2019. The findings in this research show that the policy measures adopted by government in some provinces, have had mixed consequences. For some provinces it has contained and reduced the inequality and for some other province it has worsened the inequality gap over the same period. Based on Theil’s Index, inequality coefficient has increased in provinces such as Tehran and some other relatively more developed provinces and for less developed provinces the index has decreased. Government budget expenditures disbursed among various provinces have had a bearing on inequality through the provision of public physical investment, promoting education provision, expanding health care services and capacity building enhancement. Introduction Income inequality affects economic growth performance and create disparities among regions in a country. The income inequality gap among regions contribute to adverse outcomes resulting from economic growth. There are different arguments in this regard. One categories of views emphasize on negative aspects of income inequality and economic growth (Alesina and Rodrik (1994), Persson and Tabellini (1994)) Li and Zou (1998), Amos (1988), Barro (2000). The other one emphasizes on positive aspects of income inequality. The first view argues that income inequality encourages economic growth, because of effectiveness brought about by incentives, efforts made, skill level of individuals and household’s capabilities. It seems that part of inequality stems from regional disparities and non performing spatial policies. Spatial inequality is the result of economic and regional policy measures adopted by government. Some contributing factors to inequality originate in leading economic sectors, and some other factor have roots in government policies and in growth leading provinces. From theoretical point of view, income inequality stems from political instability and income distribution channel affected by higher progressive income tax rates in order to finance regional equalization needs.(Alesina and Rodrik, 1994,Galor,2006). It’s obvious that regions undergoing economic development process with a time lag, will benefit from the policy experienced by others. Kuznets (1955) determined the mutual relation between inequality and economic growth in inverted U shape in the state of economic development and Williamson (1965) Generalized it to regions. Barrios and Strobl (2009), Lessmann (2014), Lessmann and Seidel (2017), Neves (2016) concludes that in the higher phase of economic development the Kuznets inverted U curve will take N shape.The effect of income inequality on economic growth is different due to the level of economic development, government policies, and region’s capabilities. Methods and Material Regional Inequality is estimated by different methods. Williamson (1955) and Theil’s (1965) indices selected to estimate regional income inequalities in Iran’s provinces based on following relationship: In which, CVw is Williamson index and its quantity takes a range between 0 and ∞. yi is province per capita income. is national average per capita income. pi is province population and p is total population. Williamsons index measures inequalities using population shares of each province. we used the models for two specific periods,2000 and 2019. Data gathered from SCI (Statistical center of Iran) and regional statistics.The Theil’s indices have been estimated by following equations (Cowell,2009): in which, n is number of provinces , xi is province per capita income, stands for national per capita, is province income share, log shows variables in logarithm form. Computation is made using current prices. Share of each province in total government expenditure is taken as an indicator of resources allocation mechanism in order to estimate inequality and changes their in. Results and Discussion The result, based on Theil’s indices is shown in table below:Theil’s Inequality indices calculated for Iran, in2000 and 2019ProvincesProvince-wise disbursement of Government ExpenditurechangesTheils Indices in :20002019Arak1.82-0.2440.0480.036Gilan3.56-0.4350.0520.029Mazandaran4.22-0.0210.0380.037East Azarbyjan4.810.3130.0390.051west Azarbyjan3.670.1670.0320.037Kermanshah3.19-0.2330.0330.026Khuzestan6.99-0.3970.1250.076Fars7.26-0.2420.0740.056Kerman4.590.0820.0520.056Khorasan Razavi8.16-0.4240.1040.060Isfahan5.42-0.2400.0940.071Hormozgan3.04-0.2060.0590.047Sistan and Baluchistan4.07-0.2240.0330.026Kurdistan2.54-0.0610.0200.018Hamadan2.660.0780.0220.023Lorestan2.630.0650.0200.021Ilam1.47-0.2630.0160.012Zanjan1.790.0960.0240.026Chaharmahal and Bakhteyari1.79-0.0220.0150.015 Theil’s Inequality indices calculated for Iran, in2000 and 2019ProvincesProvince-wise disbursement of Government ExpenditurechangesTheils Indices in :20002019Kohgiluyeh and Boyerahmad1.47-0.0650.0130.012Semnan1.48-0.3790.0270.017Yazd1.95-0.0800.0390.036Bushehr2.13-0.3170.0620.042Tehran6.680.6410.0970.160Ardabil1.88-0.0110.0200.019Qom1.80-0.3610.0210.014Qazvin1.71-0.4820.0540.028Golestan2.350.0330.0200.020Khorasan shomali1.572.3680.0030.011Khorasan Jonobi1.661.0240.0060.013Alborz1.650.1720.0340.039Total100-0.1241.2961.135Reference: Author’s calculation Based on our findings, the inequality between two periods under study (2000 - 2019) has decreased from 1.296 to 1.136. In some province Theil’s coefficient of inequality has increased (e.g., East Azarbyjan, west Azarbyjan, Kerman, Hamadan, Lorestan, Zanjan, Tehran, Golestan, Khorasan Shomali and Khorasan Jonobi). Tehran has experienced minimum inequality changes between two periods. But Qazvin, Gilan and Khorasan Razavi have experienced maximum changes in inequality index over the same period compared to other provinces Conclusion In Iran, Government regional resource allocation through budget provisions has affected provinces differently in terms of inequality over the specified period. Each current and capital government expenditure allocated to provinces, has affected them differently due to privilege bargaining power enjoyed by some provinces and other relevant issues involved. Endogenous factors such as local and regional investment, local incentives, entrepreneurship, stability and managerial capacities as complementary elements have played an important role in decreasing regional inequality.
Optimization
Hamed Azizi Ganzagh; Ahmad Jafari Samimi; Zahra Mila Elmi; Amir Mansour Tehranchian
Abstract
Inflation forecasting is one of the most important issues for the economies of countries, As the existing literature suggests, hybrid models will bring better prediction accuracy due to attention to both linear and non-linear dimensions. Furthermore, the use of ARDL model can include lags of other variables ...
Read More
Inflation forecasting is one of the most important issues for the economies of countries, As the existing literature suggests, hybrid models will bring better prediction accuracy due to attention to both linear and non-linear dimensions. Furthermore, the use of ARDL model can include lags of other variables in tandem with having linear features. It should also be noted that LSTM models have a forgetting gate due to their non-linear estimation characteristics, and they can incorporate data with very distant lags in the model. Therefore, the combination of these two models can significantly improve the prediction accuracy. Accordingly, attempts have been made in the current study to compare ARDL, NARX, LSTM and ARDL-D-LSTM models with one another and to introduce a suitable model for predicting Iran's monthly inflation rate in the short-term and long-term time horizon. After estimating the monthly inflation rate of Iran in the period of 4/21/2005 to 8/22/2018 and testing the model on the data for the period of 9/22/2018 to 12/21/ 2020 it was found that the NARX model and the ARDL-D-LSTM hybrid model performed well respectively for short-term time horizon and the long-term horizon according to the RMSE criteria.
Mohammad Naghi Nazarpour; Majid Habibian Naghibi; Hossein Kafshgar Jelodar
Volume 19, Issue 59 , July 2014, , Pages 181-153
Abstract
Economic development in Islamic countries, emergence of new needs for financial resources and economic development, relative achievement in Islamic investment market, and the necessity of preventing riba have compelled Muslim scholars to design new Islamic financial instruments. Capabilities of Islamic ...
Read More
Economic development in Islamic countries, emergence of new needs for financial resources and economic development, relative achievement in Islamic investment market, and the necessity of preventing riba have compelled Muslim scholars to design new Islamic financial instruments. Capabilities of Islamic contracts and the accumulation of experience in financial markets have made designing and administrating new Islamic financial instruments possible. Besides the necessity of designing new Islamic financial instruments and specialized jurisprudential investigation on sukuk to answer the increasing number of questions and meet the needs of investors, another issue should be also addressed, which is that of risk management. It must be considered in designing new Islamic financial instruments. The role of risk in this new financial instrument should not be overlooked. That is, all the risks of the bonds should be identified and ranked. This paper is an attempt in ranking morabeheh sukuk risks using simple additive weighting (SAW) method and the technique for order preference by similarity to an ideal solution (TOPSIS).Using library resources, it was made possible to describe this instrument. Based on the risk rankings, inflation risk is the most important one among all primary and secondary market risks. Other risks, such as political, interest rates, and market risks as well as currency rate fluctuations are considered secondary. In other words, the risks of secondary market are more important, compared with those of the primary market. This paper investigated the validity of two hypotheses: (1) It is possible to rank the risks of morabehe sukuk, and (2) that bonds with fixed returns, such as murabaha are less risky, compared to the bonds with expected returns.
Hosein Mohammadi; Morteza Mohammadi; Parisa Alizadeh
Abstract
Achieving a higher rate of economic growth is one of the main goals of each country that policymakers often pay special attention to it. Therefore, investigating the causes of economic growth is important. Import tariffs as one of the most important factors affecting economic growth have been neglected ...
Read More
Achieving a higher rate of economic growth is one of the main goals of each country that policymakers often pay special attention to it. Therefore, investigating the causes of economic growth is important. Import tariffs as one of the most important factors affecting economic growth have been neglected in many previous studies. Therefore, the aim of this study is examining factors affecting economic growth in ECO countries with an emphasis on the role of import tariffs during the period 1996-2014. The results of dynamic panel data using PMG estimator show that the effect of import tariffs on economic growth in the short and long run is negative and significant. In addition, the effect of trade liberalization on economic growth in the short run is positive and significant. Therefore, by reducing import tariffs and moving toward more trade liberalization, economic growth in ECO countries increases. Furthermore, the labor force had a negative effect and human capital had a positive effect on the economic growth. Finally, results showed that physical capital had the most effect on economic growth in this group of countries. Therefore, improving the business environment, encouraging private investment, moving toward more competition in economic activities with trade liberalization, and moving toward more economic transparency are some recommendations of the current study.
Gholam Reza K. Haddad; Mahboobeh Kabiri-Renani
Volume 18, Issue 57 , February 2014, , Pages 97-124
Abstract
This research investigates demand for child among Iranian urban households in an intra-household bargaining decision process. Using Household’s Expenditures Survey of Iran(2008), a count regression technique which takes into account the over-dispersion and under-dispersion characteristic of Poisson ...
Read More
This research investigates demand for child among Iranian urban households in an intra-household bargaining decision process. Using Household’s Expenditures Survey of Iran(2008), a count regression technique which takes into account the over-dispersion and under-dispersion characteristic of Poisson regression is specified as a function of intra-household bargaining factors, extra-household environmental factors, and family’s characteristics. Findings confirm the significance of extra-household environmental factorsand household’s characteristics in demand for child. Mothers with higher opportunity cost of child caring, more particularly college educated women, tend to have less children and they substitute quality of children for their quantity. As the Mothers’ bargaining power goes up, their propensity to bring more children decreases, however fathers with higher non-labor earning prefer to have more children. Diagnostic checking confirms accuracy and appropriateness of the Generalized Poisson against its alternatives. To examine the exogeneity of the explanatory variables we re-estimated the proposed specification with Generalized Method of Moments (GMM), where the hypothesis of exogeneity is confirmed. Further robustness checking by Negative Binomial distribution of dependent variable and specifying the models by mothers’ age disaggregation show that the sign and significance of estimated coefficients are similar to those of the Generalized Poisson and GMM; however modest changes have been experienced in the magnitude of estimated coefficients.
alireza karbasi; Seyed Mohammad Fahimi Fard; Hamid Reza Jahany
Volume 16, Issue 46 , April 2011, , Pages 97-113
Abstract
Rural inhabitants’ perception of better life changes when observing the success of other people, and hope to emulate their success. They know that University degree can lead to a higher expected income. In fact urbanism has some benefits but the costs (pollution, congestion, and crime) are also ...
Read More
Rural inhabitants’ perception of better life changes when observing the success of other people, and hope to emulate their success. They know that University degree can lead to a higher expected income. In fact urbanism has some benefits but the costs (pollution, congestion, and crime) are also pervasive in developing countries. In order to better understand the problem, and examine policy measures for controlling its negative externalities, it is of importance to study and analyze the factors which may affect migration. Therefore, in this study we investigated this important issue with emphasis on the effect of rural literacy level on rural-urban migration by using an Auto-Regressive Distributed Lag (ARDL) model utilizing time-series data related to the years 1959-2005 in Iran. Results indicate that in long term, rural literacy level has the most effect on this function. It was also found that, 1% increase in rural wage, urban wage, rural value added and rural literacy level can cause 0.25% decrease, 0.32% increase, 0.16% decrease and 0.32% increase in migrant’s number, respectively.
Hassan Kalbasi; Vali Gerivani
Volume 5, Issue 17 , February 2004, , Pages 99-124
Abstract
The issue of Iran’s Accession to WTO has been widely discussed in academic, business and political cycles of the nation Significant questions have been raised from industrialists and policy makers, as to the efficiency and competitiveness of new Iranian firms, and their comparative ...
Read More
The issue of Iran’s Accession to WTO has been widely discussed in academic, business and political cycles of the nation Significant questions have been raised from industrialists and policy makers, as to the efficiency and competitiveness of new Iranian firms, and their comparative advantages in the world market. The role of government policies for promotion of competitive industries has also been discussed.
So, this paper presents a method which draws on economic theory to measure cost competitiveness and its sources at the firm and industry levels. The concept of competitiveness that we use in the present study is one of cost competitiveness as measured by unit cost ratio. In other words, a firm or an industry is deemed to be competitive if its unit costs are less than or equal to the unit costs of its domestic or international rivals before or after joining to WTO.
Also this study focuses on the sources of competitive advantage. Two types of them are distinguished: first, the real sources of competitiveness such as factor productivity and factor abundance, which many lead to comparative advantage, and second, various price distortions of products and factors of productions, which may either enhance or diminish competitiveness. To do so we measure and analyze the cost competitiveness of “Mobarake Steel Complex”. We will measure the cost competitiveness of this company in aggregate level at first step, and for every product at the second step.
Yahya Fathi
Volume 8, Issue 26 , April 2006, , Pages 101-123
Abstract
This paper studies the feasibility and effectiveness of Regional Trade Arrangements (RTA’s) among the member states of Organization of Islamic Conference (OIC), based on comparative advantage principle. After a brief review on the theories of Regional Integration, the basic factors of effectiveness ...
Read More
This paper studies the feasibility and effectiveness of Regional Trade Arrangements (RTA’s) among the member states of Organization of Islamic Conference (OIC), based on comparative advantage principle. After a brief review on the theories of Regional Integration, the basic factors of effectiveness for RTA’s were reviewed. Then based on various determinants of Revealed Comparative Advantage (RCA) the feasibility and effectiveness of RTA’s among the OIC member states are analysed.The results show that a great share of the intra group exports of OIC member countries is based on comparative advantage, so the Regional Trade Arrangements among these countries are feasible and effective.
Karim Azarbayejani; Amene Shahidi; Farzane Mohammadi
Volume 12, Issue 37 , February 2009, , Pages 107-126
Ali Emami Meibodi
Volume 8, Issue 28 , October 2006, , Pages 107-122
Abstract
The crude oil price has shown some drastic changes since 1950. In a competitive or monopoly market one would expect that the real price to rise steadily as the marginal cost rises, not to jump sharply. Is it possible to explain these large movements in the oil prices on the basis of economic theory of ...
Read More
The crude oil price has shown some drastic changes since 1950. In a competitive or monopoly market one would expect that the real price to rise steadily as the marginal cost rises, not to jump sharply. Is it possible to explain these large movements in the oil prices on the basis of economic theory of resource depletion? If we can understand the real reasons of the past oil price movements, we can hope to be able to foresee what may happen in the future.
In this paper, the Hotelling-type model (Robinson, 1975 & Ulph, 1984) has been applied to analyse the factors effecting oil price movements.
Mahmoud Khataie; Roya Seyfipour
Volume 2, 4&5(Spring and Summer) , April 2000, , Pages 107-129
Abstract
Models dealing with the relation between financial Phenomena and economic growth are of Neo-Schumpeterian Growth Models. In these models, financial performance effects the sustained economic growth in two ways: the rate of capital accumulation and the affects rate of technological innovations.
In this ...
Read More
Models dealing with the relation between financial Phenomena and economic growth are of Neo-Schumpeterian Growth Models. In these models, financial performance effects the sustained economic growth in two ways: the rate of capital accumulation and the affects rate of technological innovations.
In this article, we use Patrick's approach to analyze the causality relation between financial development and economic growth. For our empirical work, we use VEC model, which shows that the development of stock market and the long term financial resources have positive and long term effects on economic growth. The causality relation works unilaterally from the real sector to financial development. Furthermore, the article analyzes dynamic effects of different shocks on economic growth, and the variance decomposition of GDP growth by VEC modes
