This paper mainly focuses on evaluating economic effects of subsidized gasoline on its consumption in Iran. Using time series data for the period of time "through ١٩٧١-٢٠٠٣", simultaneous equation model is estimated applying I٣SLS. Evaluating results indicate that there has been a positive and striking relationship between gasoline subsidy and consumption: An increase about ١٪ in subsidy has increased the consumption about ٠.٦٩٪ (percent). Each consumption and subsidy equation explains approximately ٩٩٪ (percent) of the consumption and subsidy flexibility. Therefore, based on the same consumption equation, the fixed and also the least consumption become e٧.٥١٨٨. In other words, for an increase about ١٪ (percent) in gasoline subsidy, the consumption rate will increase up to ٠.٦٩٪ (percent). A ١٪ (percent) increases in gasoline consumption causes ٠.٧٧٪ (percent) increases in gasoline subsidy rate. To sum up, the increase in subsidy during the mentioned period is the main reason for gasoline consumption rate. Based on our findings, it is concluded that by implementing the guided subsidy policy in the Iran’s ٤th economic, social and cultural plan and also in the ٢٠ years economic outlook package through reduceing consumption, using effectively and saving financial resources by government, we can expect more favorable economic impact.
Abounoori, E., Jafari-Samimi, A., & Mehnatfar, Y. (2006). An Empirical Based Analysis of Economic Effects of Subsidized Gasoline on Its Consumption In Iran; (١٩٧١-٢٠٠٣). Journal of Economic Essays; an Islamic Approach, 3(5), 33-59.
MLA
Esmael Abounoori; Ahmad Jafari-Samimi; Yousef Mehnatfar. "An Empirical Based Analysis of Economic Effects of Subsidized Gasoline on Its Consumption In Iran; (١٩٧١-٢٠٠٣)". Journal of Economic Essays; an Islamic Approach, 3, 5, 2006, 33-59.
HARVARD
Abounoori, E., Jafari-Samimi, A., Mehnatfar, Y. (2006). 'An Empirical Based Analysis of Economic Effects of Subsidized Gasoline on Its Consumption In Iran; (١٩٧١-٢٠٠٣)', Journal of Economic Essays; an Islamic Approach, 3(5), pp. 33-59.
VANCOUVER
Abounoori, E., Jafari-Samimi, A., Mehnatfar, Y. An Empirical Based Analysis of Economic Effects of Subsidized Gasoline on Its Consumption In Iran; (١٩٧١-٢٠٠٣). Journal of Economic Essays; an Islamic Approach, 2006; 3(5): 33-59.
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