An Investigation of the Impact of Price Changes on Rural Poverty (Case Study: Fars Province)



Differing consumption patterns among individuals along with relative commodity price changes has made inflation effects differ from one person to another. On the other hand, inflation continues to be a general phenomenon in Iranian economy. The impacts of price changes on rural poverty have been hereby investigated. For this, market price fluctuations in rural areas of Fars province during the past three socioeconomic plans were evaluated, and poverty price elasticity, price index for the poor, and Laspeyre's price index assessed. Results indicated that an increase in relative prices of foods and housing, reduced income inequality as pro-poor, but increase in relative prices of other groups of goods and services increased income inequality as against-poor. In addition, increase in all prices of all goods and commodities (inflation) reduced income inequality as pro-poor and so dimensions of rural poverty phenomenon in Fars Province followed a reduction trend during this period.