Document Type : Research Paper

Abstract

The Political Preference function shows how economic decisions are affected by non-market paradigms and political bargaining process. Given the corresponding function, the role of beneficiary groups in determination of endogenous policies can be identified. This study aims to extract the political preference function for the Iran's Automobile market during the period 1995-2011.We first estimate the weight of producer, consumer and government as the basic players in the market and then measure the welfare surplus of the beneficiary groups relative to the equilibrium price. The findings indicate that the producer and government have had the largest and lowest weight in the market respectively. So that, accordingly the total welfare surplus for producers, consumers and government is 4275 billion rials, -69245 billion rials and 8992 billion rials respectively. Additionally, the value for the political function is obtained -37085.198 billion rials. That is, the political economy equilibrium of the three players leads to negative welfare (social loss).

Keywords

• : Political Preference Function
• Political Weight
• Welfare Surplus
• Automobile
• lerner index