Estimation of Relative Poverty in Urban Areas of Iran (Application of Panel Data in Linear Expenditure System)

Estimation of the poverty line (A minimum subsistence) to determine the minimum required contribution to the implementation of poverty alleviation programs is essential. In this study، using a linear expenditure system (LES) and the results of surveys of household spending in urban areas during the period from 2005 to 2010، relative poverty and poverty indices were calculated. Equations of linear expenditure system for the commodity groups were system estimated method by using ISURE. Monthly poverty line in urban areas raised from 4500884 RLS in 2005 to 9197571 RLS in 2010 for 4-person household. The results indicate the relative poverty line، has increased 17% annually. By quadratic and Beta Lorenz curves fitting، poverty indicators and the Gini coefficient were calculated. Real income inequality indicators show worsening of income distribution over the years due to inflation. It is suggested that the appropriate measures to be taken to inhibition of inflation in the country and the protection of vulnerable groups and poverty alleviation programs could be more effective.