The Disparity Between Income and Expenditure of Iranian Households

The story of the unequal income and expenditure of urban households in Iran in 2014 has persisted as in previous years. According to a report by the Central Bank summarizing the results of the budget survey of urban households in 2014, the annual budget deficit of urban Iranian households averaged 1,482,600 tomans in that year. This annual budget deficit was 759,500 tomans in 2013, indicating that the gap between income and expenditure of urban households in Iran nearly doubled from 2013 to 2014. In 2014, the average gross annual expenditure of an urban household was about 32,876,000 tomans, while each urban household had an income of about 31,393,400 tomans. From 2013 to 2014, the gross annual expenditure of an urban household increased by 15.6%, while the average gross annual income of each urban household in Iran grew by 13.4%. A noteworthy point from the report on urban household budgets over the years that this data has been compiled and published by the Central Bank is that household income has consistently been less than their expenditures. Economic experts analyze this by pointing to Iranian households using their savings to meet current expenses or financing these costs through loans and facilities, which defers the payment of expenses to future years. However, the continuation of such a budget deficit, which has been evident in annual household budget reports for over two decades, has highlighted another possibility in analyzing this persistent budget deficit: the likelihood of households underreporting their income. This issue was previously noted by economist Hamed Ghoddousi on his personal blog, where he argued that using household expenditure figures as a basis for economic analysis is closer to reality. An examination of the Central Bank's reports on urban household budgets from 2009 to 2014 shows that the budget deficit of households has increased during this period, deepening the income-expenditure gap of urban households in Iran. More than one-third of incomes are spent on housing. However, the Central Bank's report on household budgets in urban areas of Iran reveals other changes regarding the living standards of Iranians, including that in the year under review, the average number of household members reached 3.44, which is a slight decrease from the previous year when this figure was 3.47. Among these, four-member households accounted for the largest share at 30.1%. In 2014, among various expenditure groups, the majority of urban household expenditures, accounting for 33.4%, were spent on housing, water, electricity, gas, and other fuels. Following this group, 24.6% of the total gross annual expenditure of an urban Iranian household was spent on food and beverages. The share of entertainment and cultural affairs from the total expenditure basket of urban households in the reported year was 2.3%, and on average, an urban Iranian household allocated 1.9% of its total expenditures to education-related costs. According to this report, 23.7% of urban households in 2014 had no employed individuals, while 15.2% of urban households had two employed individuals. An examination of the housing situation of households in 2014 also indicates that 64.4% of urban households in Iran lived in their own homes and were homeowners. 25.6% of urban households lived in rented accommodation in 2014, which shows a decrease compared to 2013. A noteworthy point in this regard is the stability of the percentage of households living in their own homes over these two years, while the percentage of households living in free housing has increased from 2013 to 2014. Another section of the Central Bank's report on the results of urban household budgets in 2014 pertains to the access of urban households in Iran to living facilities and amenities, indicating changes in the lifestyle of Iranian households. According to this report, 99.5% of households had access to piped water and 100% had electricity. A notable point in this section of the report concerns the level of access of urban households in Iran to the internet, which reached 28.4% in 2014, up from 23.9% in 2013. The percentage of urban households in Iran using personal computers also reached 48.3% in 2014, reflecting a 1.3% increase compared to 2013. The fact that 83.5% of urban households in Iran had access to freezers and refrigerator-freezers, or that 92.8% of urban households used vacuum cleaners in 2014, clearly illustrates the change in the lifestyle of these households. Ten years prior, in 2005, the level of access of urban households in Iran to freezers and refrigerator-freezers was 51.1%, and 78.2% of urban households used vacuum cleaners that year. These ratios are even more significant in terms of mobile phone usage among urban households in Iran, where only 15.8% of urban households used mobile phones ten years ago, while this figure rose to 95.2% in 2014.