Estimate the Impact of Income Inequality on Sustainable Development Indicator: Study of Iran

Sustainable development is a very broad concept, and achieving it, is a guarantee of the sustainable welfare of societies. On the other hand, income distribution affects many of sustainable development indicators. As a result, investigating the relationship between the two is essential. Based on this importance, the relationship between these two variables was the goal of this study. The Gini coefficient is selected as the independent variable and the composite index of sustainable development (combination of sustainability of human, physical and environmental capital) as the dependent variable of the research. In order to answer the research question, a panel data regression model for the Iran's provinces during 2008-2014 and using FGLS method have been used. The results show that the relationship between income inequality and composite index of sustainable development is negative and significant. The results also show that the effect of GDP growth rate and energy intensity on the dependent variable of the model was positive and negative and statistically significant respectively. While the impact of industry structure and urbanization rate is not statistically significant. Regarding the results of the regression model, we can reduce the inequality in order to attain sustainable development.