Investigating the Relationship between Urbanization and Urban-Rural Income Gap in Iran(Continuous wavelet transform approach)

Subject Areas : Regional Planning

mohsen Raji Asadabadi ^{1 *} , hashem zare ²

1 - Faculty of Economics and Management, Shiraz Branch, Islamic Azad University, Shiraz, Iran
2 - Assistant Professor, Department of Economics, Faculty of Economics and Management, Shiraz Branch, Islamic Azad University, Shiraz, Iran

Received: 2022-04-20 Accepted : 2022-10-15 Published : 2023-06-17

Keywords: urbanization, Urban-Rural Income Gap, continuous wavelet transform, phase difference,

Abstract :

Many factors such as industrial development, settlement and concentration of nomads in newly founded cities, conversion of a number of rural areas to urban areas and marginalization around big cities have increased urbanization. One of the most important factors in the increase of immigration in recent decades has been the "urban-rural income gap" and "inefficient development" in terms of social and economic aspects. Therefore, in the present study, the relationship between urbanization and the urban-rural income gap in Iran for the period of 1358 to 1398 was investigated, and in order to investigate the causality relationship between the variables used in the present study, the model was used with a new approach of analysis method. It uses continuous wavelet correlation. On the other hand, wavelet models are very efficient with the ability to analyze a time series into different and separate frequencies at any moment of time or in the term of time-frequency analysis of time series. The experimental results obtained from the estimation of the model show the existence of a strong correlation and in-phase relationship between the two variables of urbanization and the urban-rural income gap. In the short-term time scale, a strong and severe causal relationship is observed from the side of the urban-rural income gap on urbanization, so that this correlation is equal to 0.8 and this means that with the increase of the desired variable, this factor causes an increase Migration from villages to cities. In the medium and long-term time scale, there is a strong correlation between the two variables mentioned in the short-term time scale, with the difference that, unlike the short-term scale, in the medium and long term, urbanization is the leading variable, which means that the increase in urbanization itself causes The urban-rural income gap is increasing.

 

Extended Abstract

 

Introduction

Urbanization has advanced globally at a pace that was unimaginable just a few decades ago. Although the form and process of urbanization vary across regions and economies, the overall trend over the past century and a half has been a continuous rise in urban populations. This growth has gradually pushed rural life to the margins, turning the world increasingly urban. Iran has also experienced rapid urban expansion, significant growth in city populations, and the gradual depopulation of rural areas. Historical records show that the share of Iran’s urban population has risen dramatically over time, while the rural population has steadily declined. This shift can be attributed to factors such as rural migration to cities driven by industrial development, the settlement of nomadic groups in newly established cities, the transformation of rural settlements into urban areas, and the natural increase of urban populations. However, the process of urbanization is deeply intertwined with broader social, economic, and political issues. One critical challenge is the growing income gap and regional imbalance between urban and rural areas. Unequal population growth has raised concerns about how to create fair and sufficient employment opportunities. Despite various national plans and investments aimed at poverty reduction and development in rural communities, noticeable disparities remain. Rural regions still have lower access to basic services and infrastructure compared to urban centers, and poverty levels in villages are significantly higher than in cities. These realities underline the need for balanced development to address the consequences of rapid urbanization.

 

Methodology

In many previous studies, the analysis of time series is focused exclusively on the time domain and the frequency domain is ignored. However, it is possible that there are interesting and useful relationships in some of the different frequencies of the time series. In order to emphasize such issues and problems, the general method of Fourier analysis was presented to show the relationships in different frequencies between the investigated variables. However, one of the main drawbacks of using the Fourier transform to analyze time series data was the loss of all time dimension information, which made it difficult to distinguish transient relationships or identify structural changes in macroeconomic variables that Policy-making is very important. In addition to this, there is another problem in the use of Fourier transform, which refers to the unreliability of the results obtained from the model in the conditions of using non-linear time series. In using the Fourier transform, the validity of the hypothetical time series is essential (Agir-Canraria et al., 2008). Wavelet was introduced as an alternative to Fourier transform in investigating the relationship between time series. A wavelet provides features for analyzing time series variables in a spectral (frequency) framework, while also being a function of time. In other words, wavelets show changes in time series over time as well as in different periodic components, i.e. frequencies. In addition, unlike the Fourier transform, the wavelet transform is not based on the mean of time series, it is performed in the frequency domain and has the ability to detect the frequencies in the data at any point in time (Ruef and Saks, 2011). In the present research, to investigate the correlation between two time series in the range of frequency, time and difference of wavelet correlation, the tool of continuous wavelet analysis, which is known as wavelet correlation, has been used.

 

Results and Discussion

According to figure (2), in the short-term scale, that is, less than 2 years, in the 4-year period (between 1364 and 1368), there is a strong and significant correlation between the urban-rural income gap and urbanization, so that the intensity of this correlation is close to It is 0.8. On the other hand, according to the arrows determining the phase difference (Figure 1), it can be concluded that the two estimated variables are in phase and the leading variable in this time period is the income gap, so that in the short term, the changes and increase in the urban-rural income gap have an impact It is positive and increases the migration of people from villages to cities. In other words, changes in income gap cause changes in urbanization.On the other hand, in the medium-term and long-term time scale from 1367 to 1375, a strong and significant correlation can be seen between these two variables of the model, so that the correlation coefficient between these two variables in the mentioned time scale is close to 0.8.

 

Conclusion

 In this research, in order to investigate the relationship between the two variables of urban-rural income gap and urbanization, annual data from 1358 to 1398 and the continuous wavelet transformation model were used. The results of the research indicate the existence of a strong correlation and phase relationship between the two variables of urbanization and the urban-rural income gap. In addition, both variables of the model affect each other's changes depending on the time scale. So that in the short term there is a strong causal relationship from the side of the income gap to urbanization, that is, with the increase in the income gap between the urban and villagers, it increases the migration of the rural dwellers to the cities. On the other hand, in the medium and long term, as in the short term, there is a strong correlation between the two mentioned variables, with the difference that urbanization is the leading variable, which means that the increase in urbanization itself increases the urban-rural income gap. Due to the lack of land preparation for investment development and on the other hand, severe economic changes and fluctuations in the last decade, the results obtained were expected and we can expect an increase in the migration of villagers to the cities in the future. In order to prevent the destructive effects of the excessive growth of the urbanization in the country and the overcrowding of the population in the big cities, it is suggested that the government, by adopting appropriate policies and measures for the simultaneous growth and development of cities and villages, will create and continue the economic growth of the cities. and the country and witness the growth and excellence and the increase in the population of the country's villages. Otherwise, informal settlement is seen as a major social, economic, political, etc. challenge, affecting many cities in the world, especially the metropolises of developing countries.

 

 

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