Iranian Higher Education
Volume 18, Issue 1 (2026)
ihej 2026, 18(1): 1-25 |
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Salehi M J, Heidari F, Abdi N. Estimating and Analyzing the Income Elasticity of Demand for Higher Education among Iranian Households: A Provincial-Level Analysis. ihej 2026; 18 (1) :1-25
URL: http://ihej.ir/article-1-2155-en.html
URL: http://ihej.ir/article-1-2155-en.html
1- Assistant Professor, Department of Economics of Higher Education and Human Resources, Institute for Research and Planning in Higher Education, Tehran, Iran , j_salehi@irphe.ir
2- PhD in Financial Engineering, Islamic Azad University, Science and Research Branch, Tehran, Iran
3- Master's in Economic Development and Planning, Allameh Tabataba'i University, Tehran, Iran.
2- PhD in Financial Engineering, Islamic Azad University, Science and Research Branch, Tehran, Iran
3- Master's in Economic Development and Planning, Allameh Tabataba'i University, Tehran, Iran.
Abstract: (5 Views)
Objective: In considering the financing of higher education by governments, it is important to examine how the costs of higher education are borne by Iranian households and the extent to which they are willing to spend on it. This perspective leads to an analysis of the income elasticity of demand for higher education among Iranian households. Similar to many other goods and services, higher education is an economic commodity to which households respond sensitively according to their income levels. This sensitivity serves as an indicator for evaluating the income elasticity of household demand for higher education. Accordingly, this study focuses on household attitudes toward higher education and seeks to answer the key question of whether higher education is perceived by Iranian households across the provinces as a luxury, a necessity, or an inferior good.
Method: To this end, the shares of higher education in total educational expenditures and in non-food household expenditures were first calculated and interpreted across different income deciles and for urban and rural areas. Then, using a quantitative approach, via studying data from the Statistical Center of Iran, the income elasticity of demand for higher education for urban and rural households in different provinces in the year 1400 (2021/2022) was estimated.
Conclusion: The results show that as households move up the income deciles, higher education shifts from being a luxury good to a necessity for Iranian households, confirming the main hypothesis of this study. Moreover, over time, higher education has increasingly become a necessity for both urban and rural households.
Method: To this end, the shares of higher education in total educational expenditures and in non-food household expenditures were first calculated and interpreted across different income deciles and for urban and rural areas. Then, using a quantitative approach, via studying data from the Statistical Center of Iran, the income elasticity of demand for higher education for urban and rural households in different provinces in the year 1400 (2021/2022) was estimated.
Conclusion: The results show that as households move up the income deciles, higher education shifts from being a luxury good to a necessity for Iranian households, confirming the main hypothesis of this study. Moreover, over time, higher education has increasingly become a necessity for both urban and rural households.
Keywords: Higher Education, Income Elasticity of Demand, Household Expenditure Basket, Income Decile, Province
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