Examining the Social and Economic Factors Effective on Inflationary Discrepancy in Iran Urban Areas (1995-2003)

Household Consumer Price Index (CPI) will be determined in most countries without considering the differences in income (cost), in expenditure patterns and finally in goods prices for each household. The approach causes some kind of gap between the official inflation rate and the actual rate, is experienced by each household. That causes the CPI and official inflation rate, publish by the Government, and based on that economic policies and decisions are taken, would be representative of inflation rate faced by affluent household. In such a situation, the poor household may face inflation rate higher than official inflation rate, which is ignored in decision-makings. The paper is seeking to examine the inflationary discrepancy resulting from the differences of social and economic variables in the household consumer basket pattern and the analysis of the effects ignoring of this discrepancy on the outcome of Government Protectionism for households. The paper takes advantages of Variance Analysis of the inflationary rates that each household has experienced in urban areas between 1995 and 2003 (about 12000 household each year), and the effects of various social and economic factors on the inflationary discrepancy of these households will be examined, Studying the effect of each factor via hypothetical test has been done as the following, in which the treatment effect of each factor has been done in the form of analysis of Variance variation resulting from that factor and error factor. i= The Number of treatmentFor the CPT data we have utilize the Statistical Center of Iran Consumer services and Goods Prices Indexes information. The Statistical Center of Iran CPI data is available only for 2003-005 (1384-82). In order to examine the weights used in calculation of CPL we have taken advantage of foods and non-foods costs statistics of Urban Household Expenditure and Income survey, during the same period.Findings & The paper reveals that the social and economic factors including income Deciles, household size, household’s head occupational status and job and. .. are effective on the developing of the inflationary discrepancy; and in order to analyze the actual consequences of the government social and economic policies on the household welfare, taking note of this discrepancy is very crucial. Examining the inflation rate among the income Deciles makes known that in this period the prices has been grown in such a way that poor households have lost more than affluent. households have, Inflation rate analysis based on household size showed that in some years there are meaningful differences in the inflation rate of households with different sizes. Similar results have been reached regarding inflation rate for household by number of its employed members, by the main occupational groups or household’s head occupational status, For example the study of inflation rate among the household by the main occupational groups shows that the households whose heads are among the group of manager or high ranking officers face lower inflation rates compare to other households.