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ID184051
Title ProperEconomic Cost of the Islamic Revolution and War for Iran
Other Title Information Synthetic Counterfactual Evidence
LanguageENG
AuthorFarzanegan, Mohammad Reza
Summary / Abstract (Note)This study estimates the joint effect of a new political regime and war against Iraq, on Iran’s per capita Gross Domestic Product (‘GDP,’ constant 2010 US$) for the period 1978–1988, during the revolution/war. I use a synthetic control approach, whereby a synthetic Iran is constructed as a weighted average of other Middle East and North Africa (‘MENA’)/Organization of the Petroleum Exporting (‘OPEC’) countries to match the average level of some key per capita GDP correlates over the period 1970–1977 as well as the evolution of the actual Iranian per capita GDP during that period. I find a sizable negative effect of the joint treatment. The average Iranian lost an accumulated sum of approximately US$ 34,660 during 1978–1988 (i.e. the average annual real per capita income loss of US$ 3,150). This loss equals 40% of the real income per capita, which an Iranian could earn in the absence of revolution and war. The confidence sets based on constant, linear, and uniform assumptions of treatment effect show that estimated income loss for Iran is sizeable and statistically significant. The results remain robust to a set of placebo tests.
`In' analytical NoteDefence and Peace Economics Vol. 33, No.2; Mar 2022: p.129-149
Journal SourceDefence and Peace Economics Vol: 33 No 2
Key WordsWar ;  Conflict ;  Revolution ;  Iran ;  Iraq ;  Synthetic Control Method ;  Treatment Effect


 
 
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