Investigating the Consumption Pattern of Informal Workers in Iran: Review Engel’S Law

Understanding the relationship between employment status and household consumption patterns is critical for policymakers and researchers who aim to address income inequality and promote inclusive economic growth. In Iran, where a significant portion of the population faces informal employment, examining how different employment positions affect household consumption can provide insight into the dynamics of household welfare and economic development. As a result, the aim of this study is to investigate the consumption pattern of informal workers of urban and rural households in Iran and then compare it with the consumption pattern of formal workers. In this research, the dependent form of Working-Lesser system of equations was used and the model was estimated using the regression method of seemingly unrelated equations (SUR) and using the micro data of the cost and income plan of urban and rural households in 2022. The findings of this research show that in both groups of informal and formal workers in urban and rural households, food items, beverages and tobacco, housing, communication and other expenses are essential goods. While clothing items, household appliances, healthcare, transportation, cultural and recreational, educational, hotel and restaurant, and religious items, damages and diya are considered luxury goods. Therefore, the parasite law is valid among informal and formal workers of urban and rural households.