Proxy Means Tests for Targeting Subsidies Scheme in Iran - Economic Research Forum (ERF)

Proxy Means Tests for Targeting Subsidies Scheme in Iran

Mohamed Bakhshoodeh

November, 2013


18 pages

C2. Single Equation Models
I3. Welfare, Well-Being, and Poverty

In this paper, I develop a Proxy Means Tests (PMT) model and examine several targeting lines to identify beneficiaries for a targeting subsidy scheme in Iran. Based on the findings of this study, setting a cut-off percentile of 40% is expected to provide compensation for almost 70 percent of the poorest households and to result in the highest accuracy mainly in rural areas where poverty is much more severe than elsewhere in the country. Substituting the current scheme which covers almost all households in Iran with a targeting scheme based on the results of the PMT model will allow for either transferring larger amount of money to the extreme poor at the current budget or reducing the government expenditure in the form of repayment after removing subsidies on fuel and energy.



في هذه الورقة أقوم بتطوير نموذج اختبارات المتوسطات (PMT) ودراسة العديد من خطوط الاستهداف لتحديد المستفيدين لمخطط إعانة في إيران. وبناء على نتائج هذه الدراسة، نجد أن وضع قطع مئوي من 40 في المئة سوف يؤدى الى تعويض ما يقرب من 70 في المئة من الأسر الأكثر فقرا وتؤدي إلى أعلى درجات الدقة أساسا في المناطق الريفية حيث الفقر أكثر بكثير من أي مكان آخر في حاد البلاد. استبدال النظام الحالي الذي يغطي تقريبا جميع الأسر في إيران مع ومخطط الاعانة استنادا إلى نتائج نموذج PMT تسمح إما بنقل كمية أكبر من المال للفقراء في الميزانية الحالية أو تخفيض الإنفاق الحكومي في شكل سداد بعد إزالة الدعم عن الوقود والطاقة.
Policy Affiliates

Mohamed Bakhshoodeh

Professor and Head of Agricultural Economics Department, Shiraz University



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