Analysis of the Effect of Oil Rent on Economic Well-being in Iran with an Emphasis on the Underground Economy

Document Type : Research Paper

Authors

1 Department of Energy Economics, Faculty of Economic and Administrative Sciences, University of Mazandaran, Iran

2 Department of Economic Sciences, University of Mazandaran, Mazandaran, Babolsar, Iran,

3 Department of Economics, Faculty of Economics, University of Tehran, Tehran, Iran

Abstract

In this study, economic well-being and the underground economy were calculated and estimated using the Index of Economic Well-Being (IEWB), and the MIMIC method, respectively. Then, using the ARDL method in linear (symmetric) and non-linear (asymmetric) formats, the effect of oil rent on economic well-being was investigated according to the level of the underground economy over the period 1973 to 2021. The long-run results demonstrate that oil rent has a positive effect on economic well-being in a symmetric model. In an asymmetric form, oil rent has a positive and asymmetric effect on economic well-being, which means that with increases in oil rent, economic well-being boosts, and with its decreases, economic well-being lessens. Also, the impact of increases in oil rent on economic well-being is more than its decreases. Another finding is that the higher size of the underground economy causes a reduction in the favorable effect of increases in oil rent on economic well-being. The inflation rate has a negative effect on economic well-being in both models. According to the results, it is suggested that governments should strengthen the tax system and the National Development Fund during increases in oil rent, so that economic well-being is not damaged when decreases in oil rent.
JEL Classification: I31, O17, C22

Keywords

Main Subjects

References

  1. ادیب‌پور، مهدی و کرباسی‌زاده، سینا (1397). رانت نفتی و فساد در کشورهای منطقه خاورمیانه و شمال آفریقا (منا). فصلنامه علمی مدل‌سازی اقتصادی، 12(44)، 47-72.
  2. اندایش، یعقوب؛ منصوری، سید امین و محمد حسینی، آزیتا (1401). بررسی اثر نتیجه رابطه مبادله بازرگانی بر رفاه اقتصادی در ایران. بررسی‌های بازرگانی، 20(115)، 1-26.
  3. بختیاری، صادق و صمد‌پور، نرگس (1390). برآوردی از هزینه رفاهی تورم در اقتصاد ایران. دو فصلنامۀ علمی مطالعات و سیاست‌های اقتصادی، 0(19)، 3-16.
  4. بختیاری، صادق؛ رنجبر، همایون و قربانی، سمیه (1391). شاخص ترکیبی رفاه اقتصادی و اندازه‌گیری آن برای منتخبی از کشورهای در حال توسعه. پژوهش‌های رشد و توسعه اقتصادی، 3(9)، 41-58.
  5. جعفری صمیمی، احمد؛ زروکی، شهریار و ساداتی امیری، سیده رقیه (1397). تحلیل رفاه اقتصادی با تأکید بر ابعاد جهانی ‌شدن. فصلنامه علمی مدل‌سازی اقتصادی، 12 (44)، 1-23.
  6. حسین پناهی، محمد و امینی، اشرف (1390). دولت رانتی، اقتصاد دولتی، فرهنگ سیاسی و سرمایه اجتماعی در ایران. فصلنامه علمی تحقیقات سیاسی و بین‌المللی، 3(7)، 59-94.
  7. خانزادی، آزاد؛ منوچهری تبار، سپیده و تیغی، سحر (1400). بررسی اثرات تمرکززدایی مالی بر سطح رفاه اجتماعی در استان‌های ایران؛ رویکرد روش گشتاورهای تعمیم یافته. مدل‌سازی اقتصادسنجی، 6(2)، 33-63.
  8. خورسندی، مرتضی و عزیزی، زهرا (1394). برآورد آستانه تأثیر بیکاری بر شادی. تحلیل‌های اقتصادی توسعه ایران، 3(2)، 59-79.
  9. زروکی، شهریار و سورچی، مهشید (1401). تبیین اقتصاد مقاومتی با تمرکز بر نفت؛ کاربردی از رهیافت نامتقارن در اقتصاد ایران. دو فصلنامه علمی مطالعات و سیاست‌های اقتصادی، 9 (2)، 273-296.
  • شکیبایی، علیرضا و رئیس پور، علی (1386). بررسی روند تحولات اقتصاد سایه‌ای در ایران: رویکرد DYMIMIC. پژوهش‌های اقتصادی (رشد و توسعه پایدار). ۷ (۳)، 17-36.
  • صابرماهانی، مینا؛ زینل‌زاده، رضا؛ جلائی اسفند‌آبادی، سید عبدالمجید و زاینده رودی، محسن (1401). بررسی تکانه‌های بخش‌های واقعی اقتصاد بر شاخص رفاه اقتصادی در ایران. رفاه اجتماعی، 22(87)، 105-148.
  • صداقت کالمرزی، هانیه؛ فتاحی، شهرام و سهیلی، کیومرث (1398). شواهدی جدید از رابطه رانت نفت و رشد اقتصادی در کشورهای اوپک: کاربردی از مدل ترکیبی مارکوف سوئیچینگ استان‌های. مدل‌سازی اقتصادسنجی، 4(3)، 37-58.
  • صدیق محمدی، میر فرهاد؛ سرلک، احمد؛ نجفی‌زاده، سید عباس و حسن‌زاده، محمد (1400). تأثیر تکانه‌های نرخ ارز بر رفاه خانوارها در ایران: رهیافت مدل تعادل عمومی قابل محاسبه. پژوهش‌های رشد و توسعه اقتصادی، 11 (42)، 81-108.
  • عرب مازار یزدی، علی (1380). اقتصاد سیاه در ایران اندازه، علل و آثار آن در سه دهه اخیر. فصلنامه برنامه‌ریزی و بودجه، ۶ (۲ و ۳)، 3-60.
  • علیزاده، محمد؛ نعمتی، غلامرضا؛ فطرس، محمدحسن؛ خداوردی سامانی، مریم و کبیری، دینا (1401). شناسایی عوامل مؤثر بر رفاه اجتماعی ایران تحت نا اطمینانی: رویکرد متوسط‌گیری بیزی. اقتصاد باثبات، 3(1)، 61-97.
  • قادری، جعفر و استدلال، سارا (1388). بررسی تأثیر افزایش قیمت انرژی برق بر خالص رفاه گروه‌های مختلف درآمدی در ایران (۱۳۸۳-۱۳۴۶). پژوهش‌های اقتصادی (رشد و توسعه پایدار)، ۹ (۱)، 101-120.
  • گودرزی فراهانی، یزدان؛ مشتری دوست، شیوا و رمزیاری، بهزاد (1390). بررسی هزینه رفاهی تورم با رویکرد مدل‌های تعادل عمومی. پژوهش‌های پولی و بانکی، 3 (8)، 87-120.
  • مهدی‌زاده راینی، محمد جواد؛ محمدی، حمید؛ سالارپور، ماشاالله و ضیایی، سامان (1401). بررسی رابطه آزادی اقتصادی و رفاه اجتماعی در ایران بر اساس شاخص آمارتیاسن از رفاه اجتماعی. اقتصاد مالی، 16(58)، 281-308.
  • نیلی، فرهاد؛ بابازاده خراسانی، بهزاد و شادکار، محمدسعید (1394). بررسی وابستگی رفاه ذهنی مردم جوامع در حال‌ توسعه به متغیرهای کلان اقتصادی. مجله تحقیقات اقتصادی،50(1)، 21-48. 22059/JTE.2015.54095DOI:
  • ورهرامی، ویدا و حجتی، مانا (1400). بررسی عوامل مؤثر بر توسعه مالی با تأکید بر رانت نفتی و کیفیت نهادی (کشورهای منتخب صادرکننده نفت). اقتصاد و تجارت نوین، 16 (4)، 163-190.

 

  1. Abiad, A., Furceri, D., & Topalova, P. (2016). The macroeconomic effects of public investment: Evidence from advanced economies. Journal of Macroeconomics,50, 224-240.
  2. Adibpour, M., & Karbasizadeh, S. (2019). The effect of oil rent on corruption in selected Middle East and North Africa countries (MENA). Economical Modeling, 12(44), 47-72. (In Persian)
  3. Alizadeh, M., Nemati, G., Fotros, M. H., KHodaverdi Samani, M., & Kabiri, D. (2022). Identifying factors affecting Iran's social welfare under uncertainty: A bayesian average approach. Stable Economy Journal, 3(1), 61-97. (In Persian)
  4. Ampah, I. K., & Kiss, G. D. (2021). Welfare implications of external debt and capital flight in Sub-Saharan Africa (Evidence using panel data modelling). Acta Oeconomica, 71(2), 347-367.
  5. Andayesh, Y., Mansouri, S. A., & Mohammad Hoseini, A. (2022). Investigating the effect of the result of trade exchange relationship on economic welfare in Iran. Commercial Surveys, 20(115), 1-26. (In Persian)
  6. Apergis, N., El-Montasser, G., Sekyere, E., Ajmi, A. N., & Gupta, R. (2014). Dutch disease effect of oil rents on agriculture value added in Middle East and North African (MENA) countries. Energy Economics, 45, 485-490.
  7. Badeeb, R. A., Szulczyk, K. R., & Lean, H. H. (2021). Asymmetries in the effect of oil rent shocks on economic growth: A sectoral analysis from the perspective of the oil curse. Resources Policy, 74, 102326.
  8. Baidoo, D. A. (2022). Do Oil Rents Affect Unemployment Rates in Net Oil Exporting African Countries?. International Journal of Economic Studies and Management (IJESM), 2(6), 1372-1386.
  9. Bakhtiari, S., & Samad Poor, N. (2011). Estimating the Welfare Cost of Inflation in the Iranian Economy. The Journal of Economic Studies and Policies, 0(19), 3-16.
  10. Bakhtiari, S., Ranjbar, H., & Ghorbani, S. (2013). Composite index of economic well-being and its measurement for selected developing countries. Economic Growth and Development Research, 3(9), 58-41. (In persian)
  11. Bastani, S., & Waldenström, D. (2018). How should capital be taxed? Theory and evidence from Sweden. IZA Discussion Papers, No. 11475.
  12. Benkovskis, K., & Fadejeva, L. (2014). The effect of VAT rate on inflation in Latvia: evidence from CPI microdata. Applied Economics, 46(21), 2520-2533.
  13. Bental, B., & Spiegel, M. (1981). Government subsidies, inflation and consumers' welfare. Recherches Économiques de Louvain/Louvain Economic Review, 47(2), 115-130.
  14. Cao, S., Meh, C. A., Ríos-Rull, J. V., & Terajima, Y. (2021). The welfare cost of inflation revisited: The role of financial innovation and household heterogeneity. Journal of Monetary Economics, 118, 366-380.
  15. Cavallo, E., & Daude, C. (2011). Public investment in developing countries: A blessing or a curse?. Journal of Comparative Economics, 39(1), 65-81.
  16. Chekouri, S. M., Benbouziane, M., & Chibi, A. (2017). Oil rents and institutional quality: Empirical evidence from Algeria. University Library of Munich, Germany.
  17. Chiu, J., & Molico, M. (2010). Liquidity, redistribution, and the welfare cost of inflation. Journal of Monetary Economics, 57(4), 428-438.
  18. Corden, W. Max. (1984). Booming sector and Dutch disease economics: Survey and consolidation. Oxford economic Papers, 36(3), 359-380.
  19. Del Monte, A., & Papagni, E. (2001). Public expenditure, corruption, and economic growth: the case of Italy. European journal of political economy, 17(1), 1-16.
  20. Di Tella, R., MacCulloch, R., & Layard, R. (2002). Income, happiness and inequality as measures of welfare. Mimeo, Harvard Business School.
  21. Dizaji, S. F. (2016). Oil rents, political institutions, and income inequality in Iran. Economic Welfare and Inequality in Iran: Developments since the Revolution, 85-109.
  22. Dougherty, S. M., & Escobar, O. R. (2019). What policies to combat labour informality? Evidence from Mexico. Applied Economics, 51(38), 1-15.
  23. Ezekwe, C. I., Otto, G., Ozigbu, J. C., & Morris, R. (2022). Oil rents and human development outcomes in Nigeria: Evidence from a non-linear bounds approach to cointegration. Saudi J Econ Fin, 6(2), 57-62.
  24. Fuinhas, J. A., Marques, A. C., & Couto, A. P. (2015). Oil rents and economic growth in oil producing countries: evidence from a macro panel. Economic Change and Restructuring, 48, 257-279.
  25. Ghaderi, J., & Estedlal, S. (2009). The effect of electricity price increase on net welfare of different income groups in Iran: 1967-2004.The Economic Research (Sustainable Growth and Development), 9(1), 101-120. (In Persian)
  26. Gomanee, K., Morrissey, O., Mosley, P. and Verschoor, A. (2003). Aid, pro-poor government spending and welfare", CREDIT Research paper, 03/03.
  27. Gudarzi Farahani, Y., Customer Dost, Sh., & Vermziari, B. (2011). Examining the welfare cost of inflation with the approach of general equilibrium models. Monetary and Banking Research, 3 (8), 87-120. (In Persian)
  28. Haile, F., & Niño‐Zarazúa, M. (2018). Does social spending improve welfare in low‐income and middle‐income countries?. Journal of International Development, 30(3), 367-398.
  29. Hooshmand, M., SM, S. A. H., & Rajabzadeh Moghani, N. (2013). Oil rents, institutions and financial development: Case study of selected oil exporting countries. Research Journal of Recent Sciences ISSN, 2277, 2502.
  30. Hotchkiss, J. L., Moore, R. E., & Rios-Avila, F. (2020). Cost of policy choices: A microsimulation analysis of the impact on family welfare of unemployment and price changes. Journal of Macroeconomics, 63, 103167.
  31. Huang, Y., Raza, S. M. F., Hanif, I., Alharthi, M., Abbas, Q., & Zain-ul-Abidin, S. (2020). The role of forest resources, mineral resources, and oil extraction in economic progress of developing Asian economies. Resources Policy, 69, 101878.
  32. Jafari Samimi, A., Zaroki, S., & Sadati Amiri, S. R. (2019). Economic welfare analysis with an emphasis on aspects of globalization. Economical Modeling, 12(44), 1-23. (In Persian)
  33. Jalil, A., Tariq, R., & Bibi, N. (2014). Fiscal deficit and inflation: New evidences from Pakistan using a bounds testing approach. Economic Modelling, 37, 120-126.
  34. Kataranova, M. (2010). The Relationship between the Exchange Rate and Inflation in Russia. Problems of Economic Transition, 53(3), 45-68.
  35. Khan, R. E. A., & Gill, A. R. (2010). Determinants of inflation: A case of Pakistan (1970-2007). Journal of economics, 1(1), 45-51.
  36. Khanzadi, A., Manouchehritabar, S., & Tighi, S. (2021). Analyzing the effects of fiscal decentralization on social welfare in Iran provinces; Generalized Method of Moments approach. Journal of Econometric Modelling, 6(2), 33-63. doi: 10.22075/jem.2021.22172.1546 (In Persian)
  37. Khorsandi, , & Azizi, Z. (2015). Threshold estimation of the effect of unemployment on happiness. Economic Development Policymaking, 3(2), 59-79.‎ (In Persian)
  38. Lee, N., & Sissons, P. (2016). Inclusive growth? The relationship between economic growth and poverty in British cities. Environment and Planning A: Economy and Space, 48(11), 2317-2339.
  39. Malešević Perović, L. (2008). Subjective economic well-being in transition countries: Investigating the relative importance of macroeconomic variables. Financial theory and practice, 32(4), 519-537.
  40. Mallaye, D., Tatiana Timba, G., & Thierry Yogo, U. (2015). Oil rent and income inequality in developing economies: Are they friends or Foes? Centre d'Études et de Recherches sur le Développement International, 23- 1. Retrieved from https://halshs.archives-ouvertes.fr/halshs-01100843/document.
  41. Mehdizadeh Raini, M. J., Mohammadi, H., Salarpour, M., & Ziyai., S. (2022). Investigating the relationship between economic freedom and social welfare in Iran based on the Amartiasen index of social welfare. Financial Economics, 16(58), 281-308. (In Persian)
  42. Molnár, L. (2015). Analysis of the relationship among innovation performance, economic development and social welfare. Theory Methodology Practice: Club of Economics in MISKOLC, 11(1), 71-78.
  43. Montero-Moraga, J. M., Benavides, F. G., & Lopez-Ruiz, M. (2020). Association between informal employment and health status and the role of the working conditions in Spain. International Journal of Health Services, 50(2), 199-208.
  44. Mussurov, A., Sholk, D., & Arabsheibani, G. R. (2019). Informal employment in kazakhstan: A blessing in disguise?. Eurasian Economic Review, 9(2), 267-284.
  45. Nili, F., Babazadeh Khorasani, B., & Shadkar, M. (2015). Investigating the dependence of the mental well-being of people in developing societies on macroeconomic variables. Journal of Economic Research, 50(1), 21-48. (In Persian) DOI: 22059/JTE.2015.54095
  46. Noumba, I., Noula, A. G., & Nguea, S. M. (2022). Do globalization and resource rents matter for human well-being? Evidence from African countries. International Economics, 170, 49-65.
  47. Ofori, P. E., & Grechyna, D. (2021). Remittances, natural resource rent and economic growth in Sub-Saharan Africa. Cogent Economics & Finance, 9(1), 1979305
  48. Okada, K., & Samreth, S. (2017). Corruption and natural resource rents: evidence from quantile regression. Applied Economics Letters, 24(20), 1490-1493.
  49. Osberg, L., & Sharpe, A. (2002). An index of economic well–being for selected OECD countries. Review of Income and Wealth, 48(3), 291-316.
  50. Osberg, L., & Sharpe, A. (2005). How should we measure the “economic” aspects of well‐being?. Review of Income and Wealth, 51(2), 311-336.
  51. Osberg, L., & Sharpe, A. (2009). New estimates of the index of economic well-being for selected OECD countries, 1980-2007. Ottawa: Centre for the Study of Living Standards.
  52. Panahi, M. H., & Amini, A. (2011). Rentier state, state run economy, political culture and social capital in Iran (1989-2005). Journal of political and international research, 3(7), 59-94. (In Persian)
  53. Pesaran M.H., Shin Y., & Smith R.J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3): 289-326.
  54. Sabermahani, M., Zainelzadeh, R., Jalai Esfandabadi, A., & Zayandeh Roudi, M. (2023). Examining the impulses of the real sectors of the economy on the economic welfare index in Iran. Social Welfare Quarterly, 22(87), 105-148. (In Persian)
  55. Sadigh Mohammadi, M., Sarlak, A., Najafizadeh, S. A., & Hassanzadeh, M. (2021). The effect of exchange rate shocks on household’s welfare in Iran: A CGE approach. Economic Growth and Development Research, 11(42), 108-81. (In Persian)
  56. Sedaghat Kalmarzi, H., Fattahi, S., & Sohaili, K. (2019). New evidence from oil rent and economic growth in OPEC countries: An application of the hybrid model of threshold Markov switching model. Journal of Econometric Modelling, 4(3), 37-58. (In Persian)
  57. Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. Festschrift in honor of Peter Schmidt: Econometric Methods and Applications, 281-314.
  58. Tekin, A., Güney, T., & Sağdiç, E. N. (2018). The effect of economic freedom on tax evasion and social welfare: An empirical evidence. Yönetim ve Ekonomi Dergisi, 25(1), 1-13.
  59. Varahrami, V., & Hojati, M. (2021). Investigating the factors affecting financial development with emphasis on oil rent and institutional quality (Selected oil-exporting countries). Quarterly Journal,16(4), 161-190. (In Persian)
  60. Zaroki, Sh., & Sourchi, M. (2022). Explaining the resistance economy with a focus on oil: An application of the asymmetric approach in Iran’s economy. The Journal of Economic Studies and Policies, 9(2), 273-296. (In Persian)
  61. Arab Mazar Yazdi, A. (2001). Black Economy in Iran: its Size, Cuses and Effects in the Last Three Decades. Program and Budget, 6(2): 3-60 (In Persian).
  62. Zaroki, Sh., Tavassoli nia, A., Nasrnejad nesheli, S. & Khalili, Z. (2023). Analysis of the Role of Underground Economy in Economic Welfare. Public Sector Economics Studies, 1 (2), 141-162.
  63. Nasrollahi, Z., & Hosseini, A. (2017). Investigating the Relationship between Financial Development and Underground Economy in Iran. The Economic Research, 17(2), 1-24.
  64. Sameti, M.A., Sameti, M.O. & Dalaeemillan, A. (2009). Underground Economy in Iran. International Economics Studies of Iran, 35 (2), 89-114.
  65. Shakibaei, A., & Raeispour, A. (2007), The Evolution of Shadow Economy in Iran A DYMIMIC Approach.The Economic Reserch, 7 (3),17-36 (In Persian)
  66. Jafari Samimi, A., Zaroki, S., & Sadati Amiri, S. R. (2019). Economic Welfare Analysis with an Emphasis on Aspects of Globalization. Economic Modelling, 12(44), 1-23.
  67. Bakhtiari, S., Ranjbar, H., & Ghorbani, S. (2013). Composite Index of Economic Well Being and its Measurement for Selected Developing Countries. Economic Growth and Development Research, 3(9), 58-41.
Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 58, Issue 3 - Serial Number 144
December 2023
Pages 395-431

Files

History

  • Receive Date: 08 March 2023
  • Revise Date: 05 September 2023
  • Accept Date: 19 September 2023

Share

How to cite

Statistics