The Measurement of the Multidimensional Inequality Index in Urban Areas of Iran

Inequality is a major problem in the developing countries. It is also an acute and critical subject in Iran compared with other developing economies. Besides the existence of inequality, its social effects have made its explanation crucial. The aim of this research is to measure the multidimensional inequality in urban areas of Iran during three presidential periods: 1989 -1997, 1997-2005 and 2005-2013. Income, health and education are the dimensions under study. This research uses household expenditure-income survey data for the selected periods. Gini coefficient is measured for one-dimensional inequalities in terms of each dimension, generalized entropy is computed for the beginning and ending years of each period, and the multidimensional inequality is measured by using the Bourguignon index. Results indicate that the Gini coefficient decreased in terms of income dimension in all three periods while it increased in terms of health dimension during all periods. In education dimension, Gini index increased in the second period and decreased in other periods. The measured entropy indices are of some fluctuations in all periods for all dimensions. The measured multidimensional inequality index provides a wide range of results for different substitution and inequality aversion parameters. In general, this index indicates worse conditions in the second period compared with other periods.