Document Type : Research Paper
Authors
Abstract
Income distribution inequality is the source of many other inequities which could result in economic differences regarding the wealth, income, consumption and eventually welfare in the society. Reaching income distribution equality requires an appropriate application of economic tools, one of which is known to be the fiscal policy. In the present study we used GWR method for the cross section data of the years 2001 and 2006 in order to capture the effect of government expenditure (both government final consumption expenditure and government investment) on inequity (measured by Gini coefficient) in Iran. Regarding the results an increase in government final consumption expenditure per capita on average leads to more inequity, while an increase in government investment per capita can result in more equitable income distribution. Moreover, as we move from the east to the west through the country, the effect of government final consumption expenditure on income inequality increases, whilst the effect of government investment increases in the opposite direction. Spatial disparity is also significant for government final consumption expenditure in 1380 and for government investment in 2006.
JEL classification: R28, R58, H53
Keywords
)