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Economies of Scale in Food and Housing Expenditure in Iranian Households
Saeed Mehrjou * 1, Mohammad Bakhshoodeh2
1- Ph. D. of Agricultural Economics, Faculty of Economics & Agricultural Development, College of Agriculture and Natural Resources, University of Tehran, Karaj, Iran , mehrjou_s@ut.ac.ir
2- Professor of Agricultural Economics, Department of Agricultural Economics, School of Agriculture, ShirazUniversity, Shiraz, Iran
Abstract:   (360 Views)
Household-scale economics can plausibly be attributed to shared household public goods that make larger households better off at the same level of per capita resources. This paper examines the role of food and housing in the allocation of Iranian household expenditure, taking into account co-residence and economies of scale. Using a seemingly unrelated regression model for 2011 and 2021, we predict that in the presence of shared food and housing, our method (solely) exploits preference information revealed by a cross-section of household observations while accounting for fully unobserved preference heterogeneity. Our findings indicate that scale economies changed significantly from 2011 to 2021 for expenditure categories of food and housing, but not all trends in scale economies are consistent with theoretical predictions. The results show that economies of scale are recognized to be higher in the housing group than in the food group in both time periods. However, it has decreased within a decade and intensified due to the lack of appropriate government policy. In this context, the government's policies to encourage population growth have failed, and the population has encountered a low growth rate. Thus, providing support and welfare policy packages such as increasing income policy and household support insurance, as well as assistance in providing housing, are prioritized due to the economies of scale in housing.
Keywords: Economies of Scale, Household Consumption, Welfare, Food, Housing, Iran
Full-Text [PDF 622 kb]   (197 Downloads)    
Article Type: Original Research | Subject: Agricultural Economics/Agriculture Policy and price Analysis
Received: 2023/04/27 | Accepted: 2024/01/2 | Published: 2024/03/31
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Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.