Estimation of Consumers’ Welfare Changes by Using True Cost of Living Index in Iran

Subject Areas : Labor and Demographic Economics

Ali Akbar Khosravi nejad ¹ , Ebrahim Siami Araghi ²

1 - استادیار دانشگاه آزاد اسلامی واحد تهران مرکزی
2 - کارشناس ارشد اقتصاد

Received: 2015-04-19 Accepted : 2015-04-19 Published : 2012-04-01

Keywords: True Cost of Living, Linear Almost Ideal Demand System, Consumers' Welfare Change,

Abstract :

This paper introduce index numbers theory emphasis on economic approach and its applied welfare of consumer behavior. Price index number theory, product and welfare are one of the most important debate in economics while expand changes index numbers theory has been experienced in last three decades. These changes can be related to views differences of economists to index number theory. Some economists calculated welfare measurement and welfare changes with relating to demand system like Linear Expenditure System (LES) and Almost Ideal Demand System (AIDS). In this paper, True Cost of living Index is estimated by using AIDS. The Results indicate that the Cost of Living Index in rural area is larger than urban during 1997-2007.

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