This study evaluated intra and inter-regional income inequality in Iran using household cost-income data for the time period from 2007 to 2016 based on the Theil Index and Mean Logarithmic Deviation (MLD) index. It also estimated the contribution of education level to creating income inequality. The results of the study indicated that Iran faced the highest level of income inequality in 2008 compared to the whole studied period. Besides, intra-regional inequality has a major share of total inequality. The lowest income inequality index arising from the education level was found in Region 8 (Hormozgan, Sistan and Baluchestan, Kerman, and Yazd provinces) and the highest income inequality index belonged to Region 6 (Tehran, Alborz, and Qom provinces). The findings of the study also suggested that the income from the education level has a higher share in creating income inequality in provinces with a higher density of population and activities. For instance, Tehran Province with a population density of 970 persons per kilometer square and 1886 industrial workshops with 10 workers and higher has the highest share of human capital in creating income inequality. In contrast, Southern Khorasan and Sistan and Baluchestan provinces with a population density of 5 and 15 persons per kilometer square and 87 and 122 industrial workshops with 10 and more workers have the lowest share of education level contributing to income inequality.
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