Estimation of Information and Communications Engel Curve in the Residential Urban Areas of Iran

In this study, in order to estimate the Engel curve and income elasticity of Information and communications technology (ICT) for residential urban households in Iran, the Working-Leser equations system functional form has been used considering economic and social characteristics of the households. This model is estimated using Seemingly Unrelated Regressions (SUR) analysis and cross section data on nearly 19 thousands urban households for the year 2015. The results show that income elasticity of ICT for low, middle, and high-income households is 1.22, 1.12 and 0.8 respectively. These results show that ICT is a luxury good for the whole society. However, this commodity group is considered as a necessary good for the wealthy households. Also increasing the level of education leads to an increase in using of information and communication technology products. One percent increase in the years of education, leads to 0.06 percent increase in demand of information and communication technology products.