Investigation of Gas Subsidies Impact on Urban Primacy in Iran

Big cities involving a considerable part of population and economic activities are known as primate city. In most of the cases, these cities are the capital cities. In static models, whenever the urban primacy index falls off the optimal point, it can negatively affects other economic performances such as resource allocation, productivity and production. Government’s settlements in primate cities can affect urban primacy and encourage the phenomena. One of the most effective ways with which the government can prevent primate cities competition with each other or with the other cities, is to put some limitation on the local transportation infrastructures. These infrastructures have a considerable effect on urban primacy in a way that a change in transportation, its infrastructures and rules can lead to a change in the location of economic factors. Therefore the effect of urban transportation and government policies on urban development pattern is obvious. In this regard the important thing is the government’s role in leading the urban primacy index to the optimal point using policy variables and the transportation sector. In this paper have been surveyed the impact of gas subsidies on Iran’s urban primacy using OLS regression during the period of 1968-2006.The results show that gas subsidies cannot reduce urban primacy in Iran. This result shows the problem of subsidy inefficiency in Iran which is one of the common problems in developing countries.