Assistant Professor, Department of Management and Finance, Faculty of Humanities, Afagh Institute of Higher Education, Urmia, Iran.
10.30473/jier.2026.76060.1517
Abstract
Energy price reform—particularly gasoline pricing—is among the most challenging economic policies in Iran, exerting a direct impact on household welfare and the government’s fiscal sustainability. This study aims to estimate the welfare changes resulting from the increase in gasoline prices among urban households in West Azerbaijan Province. To achieve this, the Quadratic Almost Ideal Demand System (QAIDS) and the Feasible Generalized Nonlinear Least Squares (FGNLS) estimation method were employed, allowing for the simultaneous estimation of the system of demand equations while accounting for cross-equation correlations. The analysis utilizes income and expenditure data from 523 households based on the 2023 Household Expenditure and Income Survey conducted by the Statistical Center of Iran. The results indicate that food, housing, and communication represent the most essential categories in the household consumption basket, whereas gasoline and recreation are the most price-sensitive goods. The calculated Compensating Variation (CV) and Equivalent Variation (EV) measures reveal that, following a 100 percent increase in gasoline prices, an average monthly compensation of approximately 6.3 million rials per household would be required to restore welfare to its initial level. These findings suggest that gasoline price reform, in the absence of well-targeted compensatory mechanisms, may lead to a substantial decline in household welfare and intensify economic pressure on urban consumers.
عزتی شورگلی, A. (2025). Estimation of Welfare Changes Resulting from Energy Price Reforms with a Focus on Gasoline: Evidence from West Azerbaijan Province. Journal of Industrial Economics researches, 9(33), -. doi: 10.30473/jier.2026.76060.1517
MLA
عزتی شورگلی, A. . "Estimation of Welfare Changes Resulting from Energy Price Reforms with a Focus on Gasoline: Evidence from West Azerbaijan Province", Journal of Industrial Economics researches, 9, 33, 2025, -. doi: 10.30473/jier.2026.76060.1517
HARVARD
عزتی شورگلی, A. (2025). 'Estimation of Welfare Changes Resulting from Energy Price Reforms with a Focus on Gasoline: Evidence from West Azerbaijan Province', Journal of Industrial Economics researches, 9(33), pp. -. doi: 10.30473/jier.2026.76060.1517
CHICAGO
A. عزتی شورگلی, "Estimation of Welfare Changes Resulting from Energy Price Reforms with a Focus on Gasoline: Evidence from West Azerbaijan Province," Journal of Industrial Economics researches, 9 33 (2025): -, doi: 10.30473/jier.2026.76060.1517
VANCOUVER
عزتی شورگلی, A. Estimation of Welfare Changes Resulting from Energy Price Reforms with a Focus on Gasoline: Evidence from West Azerbaijan Province. Journal of Industrial Economics researches, 2025; 9(33): -. doi: 10.30473/jier.2026.76060.1517
)