Modeling Dynamics System for Land Value Taxation in Iran's Economy

Document Type : Research Paper


1 Yazd University of Economic Sciences

2 Associate Professor, University of Isfahan, Faculty of Economics Management Accounting

3 Assistant Professor, Industrial Management, University of Yazd


Iran's current taxation system cannot utilize the other facilities of taxing as an instrument for regulating market. Land is a production factor which the state can use it to impose tax for controlling the speculations, optimizing the current allocations and receiving the revenues. In this paper, we study a model on the effects of land value taxation in Iran's economy in long run as a policy emerged from economic theory using system dynamics technique. System Dynamic is a quasi-experimental simulation approach that in the Perception System has a special ability. The method based on structure control circuitry is constructed and provides the study of the structure and behavior of economic and social complex systems. The results show that by imposing a 1% tax on land value, land speculative demand will be omitted and relative price of land will be constant after 5 years. Moreover, land efficiency will be increased by 100% after one year and building lands will be increased by three times. The model is designed by using VENSIM Software.
JEL Classification: C51, H71, P16