Analysis of the Factors that Create Poverty in Iran through the Pseudo-Panel Data Approach

Poverty, as a socio-economic problem, prevents societies to attain sustainable development and growth. Therefore, poverty reduction is one of the objectives of developing countries. Knowing the status of poverty and its determinants is essential for the successful implementation of poverty reduction policies. Therefore, in this study, after the calculation of the relative poverty line in the urban and rural areas of each province by using the micro data on the income-expenditure of 38303 households gathered by the statistical center of Iran in 2013, the poor families were identified. On the basis of the initial processing of the data, it is recommended that poverty alleviation programmers pay attention to spatial planning. In the next step, to examine the effective factors in the probability of going out of poverty, the model was estimated with the maximum likelihood method. The results of the regression logit model based on pseudo-panel data with random effects showed that female-headed households are supposed to be in poverty more than males. Also, variables such as the education level of the head, statement of his or her income, and the number of the educated and the number of employees in the household have a significant effect on the probability of going out of poverty. Being in poverty is strongly associated with household size and living in urban areas. The effect of the head’s age on poverty is U shaped. It means, when the head is young, the probability of being poor is low. On the other hand, when the head is in pension years or old ages, the probability of being poor is high. Therefore, in poverty eradication programs, the government should pay attention to the elderly, especially females who head households with no income.