Agricultural Economics and Development

Agricultural Economics and Development

Investigating the Effects of Oil Revenues on Multidimensional Poverty of Iran’s Rural Regions: SVAR Approach

Articles in Press

Document Type : Original Article

Authors
Hamid Saeidi Javadi 1
Seyed Mohammad Fahimifard 2
fatemeh sakhi 3
1 Assistance Professor of Political Sciences, Department of Political Sciences, Faculty of Law, Political, Language, Islamic Azad University Mashhad Branch, Mashhad, Iran.
2 Assistant Professor, Agricultural Planning, Economics, and Rural Development Research Institute (APERDRI), Tehran, Iran.
3 PhD Candidate for Agricultural Economics, Faculty of Economics and Agricultural Development, University of Tehran, Karaj, Iran.
10.30490/aead.2026.367534.1697
Abstract
Introduction: Today, in many countries, the multidimensional poverty index is officially and annually calculated. In this regard, Islamic Parliament Research Center of Iran (IPRCI) in 2023 designed a national multidimensional poverty index based on the Alkire-Foster method in accordance with the prevailing conditions in Iran based on five main indicators of health, education, infrastructure, welfare facilities and housing. Also, one of the important economic variables that has ambiguous effects on poverty in oil-rich countries is oil revenues. Some economic researchers believe that the abundance of natural resources (oil) can help reduce poverty through transfer payments to the poor, increasing the poor’s access to education, health care, etc. However, another group of researchers believe that due to the Dutch disease, in many developing countries, increasing the intensity of natural capital (oil) leads to the detriment of human capital, physical capital and financial capital, especially in less developed sectors and regions (rural areas), and as a result, causes poverty to increase. In addition, the rural sector of the country plays an important role in the national economy due to the provision of agricultural products and food security for the community. Therefore, this study aimed at investigating the effects of oil revenues on the index of Multidimensional Poverty of Rural Regions (MPR) in Iran. 
Materials and Methods: In order to achieve the research objectives, the required data were collected from Central Bank of Iran, Statistical Center of Iran, and the Islamic Parliament Research Center of Iran (IPRCI) during the 2006-2023 and then, seasonalized. Finally, Structural Vector Auto-Regressive (SVAR) model approach and EViews software were used to analyze the data. The main advantage of the SVAR model compared to the initial VAR model is that unlike the VAR model in which structural impulses are implicitly identified, the SVAR model explicitly has an economic logic based on economic theories for applying restrictions.
Results and Discussion: The results showed that during the studied period, the multidimensional poverty index in urban, rural, and the entire country had a decreasing trend, and the provinces of Sistan and Baluchestan and Isfahan had the highest and lowest levels of multidimensional poverty values, respectively; also, oil revenues had a significant direct effect on the index of Multidimensional Poverty of Rural Regions (MPR) in Iran. So, assuming that other conditions remain constant, a one-unit increase in oil export revenue increases the MPR index in Iran by 0.173 units in the first period, 0.239 units in the second period, and a maximum of 0.295 units in the third period. Due to Dutch disease in the Iranian economy, the increase in oil revenues leads to the loss of human capital, physical capital, and financial capital, especially in less-privileged sectors and regions, and as a result, it causes a decrease in economic growth and an increase in poverty, especially in rural areas. 
Conclusion and Suggestions: Since the study results showed that due to Dutch disease in the Iranian economy, the increase in oil revenues are distributed in a way that benefits the rich more, and worsens the income distribution situation, and as a result, exacerbates the multidimensional poverty index, especially in rural regions, it is suggested that policymakers pay more attention to the distribution of benefits from oil revenues among different income groups, especially in the rural regions. Also, it is suggested to the country’s macroeconomic authorities to allocate a share of the oil revenues saved in the National Development Fund to the development of rural areas in order to reduce the MPR index. In addition, the weakness of infrastructure and welfare, educational and health services in areas far from the center is another cause of poverty and deprivation in the rural regions of Iran. In other words, the remoteness of rural areas and the weakness of such infrastructure have led to greater backwardness, poverty and deprivation in these areas compared to areas closer to the center. Therefore, it is necessary for governments and policymakers to pay attention to these differences in future programs and provide the basis for removing such obstacles through the development and improvement of various infrastructures, including communication, education, health and welfare. Finally, it is suggested to the authorities to pay attention to the specific characteristics of each region in order to eliminate poverty in rural communities. For example, given the impact of climatic characteristics on the severity of poverty in some areas such as Sistan and Baluchestan province, it is necessary to consider programs and policies to improve resilience and adaptation to climate change, such as diversifying income sources through the development of value chains and the supply of agricultural and non-agricultural products, and promoting the use of renewable energy sources such as wind and solar energy in such areas.
Keywords
Multidimensional Poverty
Oil Revenues
Rural Regions
Structural Vector Auto-Regressive (SVAR) Model.
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Agricultural Economics and Development

Articles in Press, Accepted Manuscript
Available Online from 19 April 2026