An Investigation of Added Value Impacts of Agriculture, Industry and Service Sectors on Urbanization in Iranian Provinces: An Application of Quantile Regression

Urbanization has proved to be an inevitable feature of the development of humankind, and an indispensable part of national modernization, closely connected to economic development. In recent decades, Iran has been experiencing rapid urbanization, represented by significant changes in its demographic composition and large-scale expansion of its urban landscape. When it comes to urban policies, investigating the factors affecting urbanization is an important issue. So, the purpose of this study is to investigate the effect of added value of agricultural, service and industry sectors on urbanization in Iranian provinces during the period of 2004-2016 using quantile regression method. The results, indicate that the added value of agriculture, service and industry have a positive and significant effect on the rate of urbanization in Iran. Moreover, the inflation rate in urban areas and the urban households’ total expenditure had a negative effect on the urbanization rate. Based on the other results of this study, the effect of agriculture sector and industrialization on high urbanization rates, has been strengthened in high urbanization quantiles. Similar results were obtained for inflation rate and urban household expenditures, although the effects of these two variables were negative. JEL Classification: Q10, O13, R10.