Investigation of Economic Effects of Energy Carriers Price Increases on the Composition of Consumption Expenditures of Urban Households

Subject Areas : Journal of Investment Knowledge

Seed Mohamad Mehdi Ahmadi ¹ (PhD student in Economics, Science and Research Branch of Tehran, Islamic Azad University, Tehran)
Jamshid Pajhuyan ² (Professor of Allameh Tabatabai University)

Received: 2014-04-22 Accepted : 2014-07-12 Published : 2014-07-12

Keywords: Energy Carriers, Composition of Consumer Expend, Almost Ideal Demand System, Panel data,

Abstract :

The main purpose of this paper is to investigate the effects of energy carriers price increases on composition of consumption expenditures of urban households using Almost Ideal Demand System(AIDS). For this purpose, initially seven groups of goods and services including: food and beverage portion, shoes and clothing, transport, communication, hotels and restaurants, water, electricity, gas and other fuels, and other groups is estimated by applying seemingly unrelated regression method and data years of 1380-1389 for 10 cost deciles.Then, the average share of the groups for the years 1390 to 1392 by considering two scenarios increased by 20 and 38% of the price of water, electricity, gas and other fuels as a proxy for energy carriers is predicted. Our results indicate that despite the change in the share of each group of goods based on these two scenarios, but this does not shift in consumer preferences or combined groups of urban households in different deciles.