Relationship between Growth and Income Distribution - In Rural Areas of Iran With Spatial Panel Approach

Document Type : Research Paper

Authors

• fazel ghobaishavi ¹
• Ahmad Akbari ²
• Amir Dadrasmoghadam ³
• Mahdi Safdari ⁴
• Ali Sardar Shahraki ⁴

¹ Ph.D. Student, Department of Agricultural Economics, Faculty of Management and Economics, University of Sistan and Baluchestan, Zahedan, Iran.

² Professor, Department of Agricultural Economics, Faculty of Management and Economics, University of Sistan and Baluchestan, Zahedan, Iran. Sistan and Baluchestan University, Zahedan, Iran

³ Assistant Professor, Department of Agricultural Economics, Faculty of Management and Economics, University of Sistan and Baluchestan, Zahedan, Iran.

⁴ Associate Professor, Department of Agricultural Economics, Faculty of Management and Economics, University of Sistan and Baluchestan, Zahedan, Iran.

10.30495/jae.2023.28497.2264

Abstract

Introduction: Considering the effect of income distribution on poverty and economic well-being of villagers, knowledge of the factors affecting how income is distributed in rural areas of the country will be necessary to formulate poverty alleviation policies. Economic growth is recognized as one of the factors influencing the income distribution pattern.
Materials and Methods: In this study, using composite data in the Kuznets hypothesis curve, the relationship between economic growth and income inequality in rural areas of Iran has been investigated using the Spatial panel approach during the period 2011-2019.
Findings: The results of the study indicate the existence of spatial over, so that in this study the effect of spatial economic growth (GDP per capita) is a positive and significant relationship with the rural Gini coefficient in the provinces of Iran. However, the effect of the Spatial over of the economic growth space of the agricultural sector (value added of the agricultural sector) has had a negative and significant effect on the rural Gini coefficient in the provinces of Iran. The results also show that there is an inverse U-shaped relationship between agricultural sector growth and income distribution. Therefore, Kuznets hypothesis is confirmed in rural areas of Iran.
Conclusion: It is suggested that given that economic growth has not been justice-oriented and poor growth based on the distribution of incomes in rural areas of the provinces, in order to improve income distribution in rural areas of the country, economic policies should be in line with accelerating the growth of agriculture.

Keywords

• Economic Growth
• Income Inequality
• Rural Areas
• Spatial Panel
• Kuznets Curve

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