Assessing the Effect of Economic Sanctions on the Demand Analysis of Tea, Sugar and Sugar Baskets of Iranian Urban Households

  it is important to correctly estimate income and price elasticities and the impact of economic sanctions on the consumption behavior of Iranian households. So, the purpose of this paper is to investigate the consumption behavior of urban households in Iran by applying the quadratic almost ideal demand system (QUAIDS). Also, the existence of structural failure in the consumption basket preferences of tea, sugar, and sugar of urban households has been investigated using the parametric approach and the switching regression framework developed by Ohtani and Katayama (1986) from 1998 to 2022.The price elasticity of various types of tea, sugar, and sugar has increased after sanctions and Iranian and foreign tea, sugar and sugar have changed from non-elastic products to products with elasticity. The increase in price elasticities shows that with the increase in prices and inflation in the years after the sanctions, the sensitivity of consumers to price changes has increased. Therefore, considering the elasticity of the high price of products after the sanctions, it will be the right decision to use price tools to protect consumers.