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Investigating the Impact of Privatization on Social Welfare: Smooth Transition Regression Approach

Document Type : Original Article

Authors

1 Assistant Professor, Department of Economics, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran.

2 M.Sc. Student, Department of Economics, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran.

Abstract

Improving the level of social welfare is one of the main aims of countries. Various factors can affect social welfare the privatization is one of these factors. this study has investigated the effect of privatization on social welfare in Iran based on Amartya Sen social welfare index during the period 1991 to 2022 Using the smooth transition regression approach. The control variables of the research include trade openness, industrialization, energy consumption and carbon dioxide emissions. Based on the findings of the research, the optimal model is non-linear with 2 regimes and the transition from regime 1 to regime 2 has happened very gently. The results indicate that privatization before the threshold value of 2476.16 during 1991 before 2003 has a positive and significant effect on the social welfare index and after passing the threshold value during 2003 to 2022, the positive effect has decreased and gradually changed to a negative effect. Trade openness has no significant effect on social welfare in the first regime and has a negative and significant effect in the second regime. Industrialization and energy consumption variables had a negative and significant effect in the first regime and a positive and significant effect in the second regime.

Keywords

Main Subjects

References
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Economic Policies and Research
Volume 3, Issue 1 - Serial Number 9
June 2024
Pages 32-61
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