The Tehran Chamber of Commerce recently unveiled a comprehensive report titled ‘Investigation of Household Income and Consumption Patterns in Tehran Province.’ This insightful document scrutinizes the shifts in household dynamics from 2017 to 2022, offering a nuanced perspective on the economic challenges faced by Iranian families.
Income Composition Shift:
Over the specified period, the composition of household income in Tehran has undergone a notable transformation. Freelance jobs, once a significant source of income, have been eclipsed by non-work-related sources. This shift indicates a reliance on sectors that are often perceived as unproductive. Non-working incomes, including pensions, estimated personal housing rents, and various other sources such as rent from business premises, property and land, deposit interest, insurance receipts, and educational grants, have become the primary contributors to household income.
Subsidy Ineffectiveness:
One striking revelation from the report is the dwindling impact of subsidies on household budgets. The share of household income from subsidies has reached zero, emphasizing the need for a reassessment of subsidy programs. The income disparity between the tenth and first income deciles has widened significantly, signifying a deviation from the original goal of supporting vulnerable and low-income populations.
Income Inequality:
The report’s analysis of income inequality exposes stark contrasts between different income deciles. In 2022, the income of the tenth decile is approximately 30 times that of the first decile for urban households nationwide. Rural households face an 18.3 times difference, while urban households in Tehran experience an 8.6 times gap. This widening income inequality raises concerns about the economic well-being of various segments of the population.
Changing Expenditure Patterns:
Household expenditure patterns have evolved significantly, reflecting a prioritization of essential goods. Housing, fuel, and lighting constitute the largest expense at 38.03%, followed closely by food and tobacco at 26.5%. Miscellaneous expenses, covering personal grooming, durable goods, and social support, make up 11.59%. Despite increased spending on these essential items, households find it challenging to attain their desired standards of living in housing and food due to rising costs.
Impact on Education and Well-being:
A concerning trend highlighted in the report is the decline in the share of education expenses, particularly among lower-income deciles. This reduction, notably around 73% for the first decile, raises alarm bells about the potential for intergenerational poverty. Additionally, the decrease in spending on entertainment, recreation, dining out, and other non-essential expenses underscores the economic challenges faced by households in maintaining overall well-being.
Rising Inflation and Economic Challenges:
The report underscores the ineffectiveness of subsidies in improving the well-being of Iranians. This challenges the government’s claims of supporting vulnerable groups, especially in the face of increasing inflation, high costs of goods and services, and a notable surge in the poverty risk index. Economic experts and the public have expressed skepticism regarding President Ebrahim Raisi’s repeated assertions of reaching the ‘peak,’ citing these economic challenges.
Conclusion:
In conclusion, the Tehran Chamber of Commerce’s report provides a comprehensive and in-depth analysis of the economic challenges encountered by households in Tehran province. The shifts in income composition, subsidy ineffectiveness, income inequality, changing expenditure patterns, and the impact on education and well-being collectively paint a vivid picture of the economic landscape. Addressing these challenges requires targeted policy interventions to promote economic stability and ensure the well-being of the population.
