Association of Subsidies for Wheat and Flour with per Capita Consumption of Bread among Iranian Households

Fiscal policies can play an important role in the behavior and health of consumers. This study aimed to analyze the trend of bread consumption in Iran and changes in the amount of subsidy paid to it.

In order to achieve the objectives of this study, the amount of bread consumed in Iranian households was extracted from the balance sheet of food products of the Islamic Republic of Iran during 2002-2011 and the amount of subsidy paid to it was obtained from the documents and statistics available at the ministry of economic affairs and finance and consumer and producer protection organization. Data analysis was conducted with SPSS, version 16, using descriptive statistics, Pearson correlation test and linear regression with 95% confidence interval.

Linear regression results showed statistically significant difference between subsidies for bread, bread consumption (p=0.019 and r=0.720) and energy level produced in the body (p=0.003 and r=0.824). For each one miliard Rials increase in subsidies paid for bread, 63.712 tons of bread consumption and 0.014 kilo-calories of daily energy consumption were decreased.

In order to hold bread price constant, huge money is spent as subsidies for this product every year. Not paying attention to flour quality and low quality of bread produced in bakeries has caused a part of subsidies to be spent for bread waste and per capita consumption of bread has decreased as a result.