The Effect of Credit Policies on Income Inequality in Iran: Generalized Quantile Panel Regression Approach

Document Type : Research Article

Authors

1 Assistant Professor, Department of Economics, Research Institute of Economic Affairs, Tehran, Iran

2 Assistant Professor, Department of Economics, Payame Noor University, Tehran, Iran

Abstract

One of the most important indicators for evaluating any economic policy is to examine its distributive effects, so governments try to be aware of the redistribution of revenue and the possible effects of such policies in a quantitative and tangible manner before implementing the policy. Therefore, in the present study, for the first time in the Iranian economy, with quarterly data and generalized quantum method, the distributive effects of credit policies on income inequality in the provinces of the country were investigated. Based on this, the results showed that in the primary quantile (0.05), credit to the trade and services sector had a positive and significant effect on income inequality and also credits to agriculture, housing, industry and mining had a negative and significant effect on income inequality in the provinces. In the Middle Quantile (Quantile 0.5), lending to the agricultural and commercial sectors had a negative effect, and lending to the housing, services, industry, and mining sectors had a positive effect on income inequality. Also in the upper quantum (Quantile 0.95), facilities granted to the agricultural, commercial, industrial and mining sectors had a negative effect, as well as loans to the housing and services sectors had a positive effect on inequality in the provinces of Iran. Regarding the effect of human capital and economic growth on income inequality, the results showed that in the provinces of the country, increasing economic growth and human capital due to creating more opportunities to increase income, has reduced income inequality. According to the research results, in all quantiles, the increase in the effect of inflation and capital stock has caused more income inequality in the provinces.

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References

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Journal of Applied Economics Studies in Iran
Volume 12, Issue 45
April 2023
Pages 177-202

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