Investigating the Relationship between Value Added of Agricultural Sub sectors and Income Inequality in Rural Areas of Iran

Income inequality is one of the most important issues that due to its impact on various aspects of economic welfare, food security and the issues that will arise after it is seriously considered by economic policy makers. Therefore, the purpose of this study is to investigate the relationship between value added of agricultural sub-sectors and income inequality, considering the different effects that increase in value added of agricultural sub-sectors have on income distribution. For this purpose, the combined group average (PMG) approach has been used. The results show that the effects of increasing the value added of the agricultural sector on income inequality are negative and at the level of subsectors, in the long run, short term and in the sections (provinces) different results are obtained. Thus, what can be concluded from this type of analysis is that strict macro-policy for all sub-sectors and all provinces of the country due to their differences can not achieve similar results. Therefore, it is suggested that the macro-sectoral view of the agricultural sector be changed and replaced by the macro-subsectoral view. In the following, development policies appropriate to each province and depending on the nature of the subsectorss of each province should be considered.