Tax Revenues and Economic Welfare Inequality in Iran Provinces (Copula Approach)

Articles in Press

Document Type : Original Article

Authors

1 PhD in Economics, Department of Economics, Razi university, Kermanshah, Iran

2 Associate Professor in Economics, Department of Economics, Razi university, Kermanshah, Iran

10.22075/jem.2025.38340.2022

Abstract

Provincial tax revenues, as a primary source of local government income, play a substantial role in creating inequalities and welfare gaps between regions. Therefore, this study aims to analyze the dependence structure between regional tax revenues and economic welfare inequality in Iranian provinces. The framework chosen for modeling and understanding the relationship between per capita tax revenue and the provincial Misery Index (as an inverse indicator of economic welfare) is the Copula statistical method, encompassing data from 31 provinces over the period 2011-2021. The simulation results indicated that the Roch-Alegre Copula function best explains the dependence structure of the data. Furthermore, Spearman and Kendall correlation analysis confirmed a significant but weak negative relationship between the variables. This weak correlation highlights the disconnect between the amount of taxes collected and their effective use.

Keywords

Journal of Econometric Modelling

Articles in Press, Accepted Manuscript
Available Online from 05 September 2025

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