Economics in action: three essays

Karimi, Seyed Mohammad

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Description

Title

Economics in action: three essays

Author(s)

Karimi, Seyed Mohammad

Issue Date

2014-09-16

Director of Research (if dissertation) or Advisor (if thesis)

Gahvari, Firouz

Doctoral Committee Chair(s)

Gahvari, Firouz

Committee Member(s)

• Salehi-Esfahani, Hadi
• Polborn, Mattias K.
• Baer, Werner W.

Department of Study

Economics

Discipline

Economics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Height
• Ramadan
• Subsidy
• Welfare
• Poverty

Abstract

In this thesis, I examine the health, welfare, and distributional implications of the society's institutions and public policies in three separate chapters. In the first chapter, I show that exposure to Muslim religious fasting month during gestation results in significant decline in the body height. In the second chapter, I examine the welfare, fiscal, and environmental consequences of a structural change in the public policy that substitute indirect energy and food subsidies -- price subsidies -- with direct cash transfers to household. Finally, in the third chapter, I measure the distributional effects of several countrywide welfare programs in interaction with economic growth and households' characteristics. In the followings, I have provided summaries of each chapter. In the first chapter, to estimate the effect of nutritional disorder during pregnancy on children's height, I use Demographic and Health Survey data from numerous developing countries that include children's exact birth dates and employ exposure to the Islamic fasting month of Ramadan as a natural experiment. I find that Ramadan-induced prenatal nutritional disorder causes a 3.5 to 10.5 millimeter decrease in the height of Muslim boys at ages 3 and 4. I identify no effect on females including children and children's mothers. I also show that exposure to Ramadan becomes significant when it occurs for more than 10 days, there is no intergenerational transmission from mothers to children, and latitude does not influence the effect. The robustness tests show that the results are not driven by selection into fertility, seasonality, or observations from a specific country. In the second paper, I use the 1987-2010 Household Budget Surveys from the Statistical Center of Iran consisting of 273,879 observations, coupled with the price data from the Central Bank of Iran, to estimate the structure of demand for goods and services in urban areas of Iran. The estimation procedure assumes a Quadratic Almost Ideal Demand System (QUAIDS) introduced by Banks et al. (1997). It uses the estimated demand system to study the implications of the removal of the massive subsidies on energy and basic foodstuff that were in place in Iran up to 2010. I examine the economy's consumption patterns, income distribution, private and social welfare, and the environment. The third chapter employs quantile regression method and household expenditure surveys to assess the general equilibrium effects of public spending and social protection programs on household expenditure distribution in Iran. The approach captures the broad consequences of programs, taking into account their direct and indirect effects through price changes, interpersonal transfers, demonstration effects, and the like. I also control for and assess the role of household characteristics and geographic and time fixed effects. The case of Iran is interesting and important because in recent decades the country has experimented with new institutional arrangements to address poverty and has been relatively successful in this regard, as the findings confirm. This study covers the 1993-2006 period. For policy analysis I focus on 1998-2005, the so-called “reform period” in Iran. I find that growth has been unequalizing, but changes in education, government spending, and a unique agency established after the revolution of 1979 to provide social safety net have counteracted with that effect and raised the incomes of the bottom half of the population faster than the rest. The upper end of the distribution has also benefited somewhat, leaving those in the 50 to 85 percentiles behind.

Graduation Semester

2014-08

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Copyright 2014 Seyed Mohammad Karimi

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