Factors Affecting Educational Expenses of the Urban Iranian Households

Austerity policies such as those reducing subsidies lead to a reduction in household income and eventually to less demand for education which is a threat to the aspiration of full educational coverage. Change in income has different effect on demand for education among different consumer groups. Urban families are divided into five groups in terms of similarity in educational expenditure. These five groups were also found to be different in their view of education as a necessary vs. luxtury commodity. Households belonging to the first and third group who consider education as a luxtury commodity show a greater sensitivity to income changes when it comes to education. Their demand for education decreases increasingly when their income is lowered. Thus, state policies ought to consider ways of compensating for the decrease in these group's educational demand.