Economy of Scale and Poverty Line: A Case Study of Iranian Urban Households (2006- 2011)

Poverty line، both with the absolute and relative definitions، is a quite popular policy tool for characterizing the poor people from non-poor With taking into account the households’ characteristics، this research intends to estimate the poverty lines among urban areas of Iran. To this end، we use the well- know linear expenditures system at household level and households’ income and expenditures surveys over 1991-2011across the provinces of Iran. Findings show that، age، literacy، activity type، marital status، sex، and relative income have positive effects on food and non-food expenditures. Consequently، the scale of non-food poverty line over the studied years and across the households with any size are above the food poverty line in magnitude. Calculated the absolute poverty line of a one-person household is 1803144 Rials and that of a ten-people household amount to 17318746 Rials in 2011. This reflects economics of scale in the consumption of goods and services in households، namely defined as the amount of households’ welfare، does not have typically a one-one relation with family size.