The welfare effects of economic sanctions on final consumers of goods and services in Iran

APA 6th edition
In-text: (Ezzati & Salmani, 2017)
Your Bibliography: Ezzati, M. & Salmani, U. (2017). The welfare effects of economic sanctions on final consumers of goods and services in Iran. International Journal of Environmental and Science Education, 12(4), 679-692.

Harvard
In-text: (Ezzati and Salmani, 2017)
Your Bibliography: Ezzati, M. and Salmani, U. (2017). The welfare effects of economic sanctions on final consumers of goods and services in Iran. International Journal of Environmental and Science Education, 12(4), pp. 679-692.

Chicago 16th edition
In-text: (Ezzati and Salmani 2017)
Your Bibliography: Ezzati, Morteza and Uunes Salmani (2017). "The welfare effects of economic sanctions on final consumers of goods and services in Iran". International Journal of Environmental and Science Education 12 (4):679-692.

Abstract

In this study, using AIDS (Almost Ideal Demand System), we estimated direct and indirect welfare effects of economic sanctions on final consumers of (durable, semi-durable and non-durable) goods and services in Iran during 1981-2012 period. We also analyzed changes in consumer behavior due to sanctions. In order to analyze welfare effects, welfare criteria of Equivalent Variation (EV) and Compensating Variation (CV) were employed, and for testing behavior change, Marshall and Hicks criteria of elasticities were used. The results showed that: 1) the welfare effect rises when sanctions are removed (direct welfare effect). 2) As price of goods and services increases, welfare costs of final consumers and government get higher upon sanctions as compared to when they are removed (indirect welfare effect). 3) Sanctions created a structural failure in behavior pattern of final consumers of goods and services, so that influenced by sanctions, income, price and substitution elasticities of goods and services changed (change of consumers’ behavior pattern).

Keywords: Sanction, Welfare Effect, Equivalent Variations, Compensating Variations, Demand, Almost Ideal Demand System (AIDS)

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