Housing costs and inequality in post-revolutionary Iran

In this chapter, we investigate the association between housing prices and income inequality in Iran over the last three decades. In the recent period, Iran has had the highest average Gini coefficient in the Middle East (see Table 5.1), a region where inequality has triggered social tension, political instability, and armed conflict (Azeng and Yogo 2013). Moreover, debates on inequality and poverty have featured prominently in Iran’s domestic politics since the 1979 Revolution. For example, popular dissatisfaction with inequality is believed to have contributed to an electoral victory in 2005 for the populist presidential candidate Mahmoud Ahmadinejad (Farzanegan 2009)—whose subsequent management of the national economy nonetheless resulted in negative economic growth as well as double-digit inflation and unemployment rates