International Journal of Nonlinear Analysis and Applications

Presentation of the model direction determining effective economic variables on the multidimensional poverty index in Middle East countries in time (1995-2017)

Document Type : Research Paper

Authors

1 Department of Economic Sciences, Qeshm Branch, Islamic Azad University, Qeshm, Iran

2 Department of Economics and Accounting, Faculty of Management and Economics, Hormozgan University, Bandar Abbas, Iran

3 Department of Agricultural, Economics, Faculty of Agricultural Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran

4 Department of Economics, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran

Abstract

The purpose of this study is to provide a model to determine the economic variables affecting the multidimensional poverty index in the Middle East in the period (1995-2017). The method of the present research is descriptive-analytical. The statistical population of this study is Middle Eastern countries. Data collection has been done using official statistical centers in different countries in cooperation with the Statistics Center of Iran. Data analysis was performed using Eviews and SPSS software version 21. Various variables were effective in estimating the multidimensional poverty index in Middle Eastern countries. But the variables of human capital, capital formation, foreign trade, inflation rate due to terrorist threats, gross domestic stability) were analyzed as the most important influential variables. The generalized torque (GMM) method was used to analyze the proposed model and tests such as Sargan, regression coefficient, Jarco-Braha test, Watson camera statistics were used. The results of multidimensional poverty index analysis in the Middle East using the period from 1995 to 2017 in terms of manpower index (balanced fluctuations), gross domestic stability (constant fluctuations), inflation due to terrorist threats (high fluctuations with steep slopes into increase poverty), capital formation (poverty reduction fluctuations), foreign trade (very large fluctuations to reduce poverty). The results of estimating the research model in the form of a dynamic model by the generalized torque (GMM) method showed that the probability value related to the validity of the null hypothesis that the coefficient of variables FI (t-1), foreign trade (trade), inflation) is zero. Due to terrorist threats (IN), CF capital formation, Gross Domestic Stability (INV), and Human capital (H), the fixed value of the model is equal to 0.062, 0.042, 0.025, 0.046, 042, respectively. 0.8, 0.844, is smaller than the probability of the first type error 0.05. Therefore, at this level of error, the significance of the effect of these variables and the presence of a constant value in the model is not denied. The explanation coefficient of the model is equal to 0.738 and is larger than the standard limit of 0.7. Therefore, predicting the multidimensional poverty variable in Middle Eastern countries according to the independent variables considered in the model has relatively high accuracy.

Keywords

[1] S. Guillaumont-Jeannene and K. Kpodar, Financial development and poverty reduction: Can there be a benefit without a cost, J. Dev. Stud. 47 (2020), no. 1, 143–163.
[2] S.M. Hosseini and S. Khazaei, The impact of financial development on poverty and inequality in ECO member countries, Econ. Dev. Res. Quart. 16 (2018), 1–22.
[3] K. Imran and S. Khalil, Contribution of financial development in poverty reduction through industrial growth, Int. J. Asian Soc. Sci. 2 (2020), no. 5, 567–576.
[4] V. Kapel, The effect of financial development on income inequality and poverty, Center of Economic Research at ETH Zurich, Working Paper, (2019), no. 10127, 1–40.
[5] H.Y. Kim and S.C. Lin, Nonlinearity in the financial development–income inequality nexus, J. Comparative Econ. 39 (2018), 310–325.
[6] A.Y. Kurniawan, Trade Liberalization, Poverty, and Income Inequality: An overview, Justious Liebig University Giessen, 2020.
[7] Q. Liang and J.Z. Teng, Financial development and economic growth: Evidence from China, China Econ. Rev. 17 (2016), 395–411.
[8] M. Mutusali and S. Samadi, Understanding economic aspects of poverty reduction programs, Econ. Res. 34 (2000), no. 2, 65–98.
[9] M. Omrani, Z. Mohammadzadeh and M. Dehmardeh, Determinants of poverty and welfare changes of rural households in Sistan region, Agricul. Econ. Res. 1 (2016), no. 2.
[10] P. Ordonez, Financial development and poverty: A panel data analysis, Borradores De Economia Y Finanzas, Working Paper, (2020), no. 10024, 122–135.
[11] R.A. Pollak and T.J. Wales, Estimation of linear expenditure system, Econometrica 37 (2017), no. 4, 629–650.
[12] A. Qanbari, M. Aghaei and M. Reza Qolizadeh, Investigating the impact of financial development on income distribution in Iran, Econ. Res. Paper 11 (2016), no. 1.
[13] H. Raghofer, M. Babapour and M. Yazdan Panah, Survey on the relationship between economic growth, poverty, and inequality in Iran during five-year development plan, Quart. J. Appl. Econ. Stud. Iran 4 (2017), no. 16, 59–79.
[14] A.A. Salem and J. Arab Yarmohammadi, Investigating the relationship between financial development and income distribution in Iran’s economy, Trend J. (Econ. Res. Trends) 19 (2010), no. 58.
[15] D. Santos Pereira, A.C. Marques and J.A. Fuinhas, Are renewables affecting income distribution and increasing the risk of household poverty?, Energy 170 (2019), no. 1, 791–803.
[16] A. Shahabadi and B. Amiri, The impact of financial development on poverty in group D-8 countries, Plann. Budget. 18 (2019), no. 4.
[17] M. Shakeri, A, Jafari Samimi, and Z. Karimi Moughari, The relationship between institutional variables and economic growth: Introducing a new institutional measure for Middle East and North Africa (MENA), Econ. Growth Dev. Res. 6 (2016), no. 21, 93–106.
[18] S.K. Tayibi, Y. Abbaslou and L. Bayari, Determinants of economic inequality in selected Islamic countries with an emphasis on the role of Islamic economy, Collect. Articles Islamic Econ. Dev. Conf., 2017.
[19] J. Von Hagen and H. Zhang, Financial development, international capital flows, and aggregate output, J. Dev. 106 (2018), 66–77.
[20] A. Zarei, Investigating the impact of financial development on poverty, a case study: Middle East and North African countries, Master’s Thesis, University of Tehran, 2014.
International Journal of Nonlinear Analysis and Applications
Volume 15, Issue 7
July 2024
Pages 281-288
  • Receive Date: 21 February 2023
  • Revise Date: 12 June 2023
  • Accept Date: 16 June 2023