Economic Performance of Housing Sector in Iran

Housing forms an important sector of the national economy and the largest component of household net wealth in most countries. In this study, Data Envelopment Analysis (DEA) is used to evaluate housing industry performance in different states of Iran based on relevant data collected from the Ministry of Housing and Urban Development and Statistical Centres of Iran during 2008-2009. The results show that only 37 percent of the states operate technically efficient and the average overall efficiency score obtained by all the states is 0.90. On the other hand, 63 percent of the states are found to be relatively inefficient and mostly present decreasing returns to scale. The paper concludes that, appropriate mechanisms should be implemented for all interventions of the government for stabilizing housing environment within different states, ensuring maximal benefit of state housing expenditures, mobilising private savings and finally coordinating public and private sector investment on a multi-functional basis.