An Analytical Approach for Studying the Poverty in Iran

In this paper an attempt is made to investigate the relation between the poverty as an independent variable and income growth, distribution of income and inflation as dependent variables for the period of (2004-2013). We also estimated the elasticity of poverty indices with respect to income growth, distribution of income and their components ipso facto. It is worth to note that the poverty and distribution of income are measured by FGT (α) and Gini coefficient, respectively. We also focussed on measuring and analyzing the impact of inflation on poverty through evaluating the price elasticity of poverty. Moreover, we calculated a new price index in which by its utilization, one may judge whether price changes are pro-poor or not.The results of our research prima facie indicate that though the income growth is an important factor affecting the poverty, but the distribution of income variable is bearing more impact on poverty particularly in big cities per se. Nonetheless, we have found that inflation is not a pro-poor factor, and increase in prices of essential goods i.e. food and shelter could deteriorate the conditions of poor people, sine qua non.