The Impact of Targeting Subsidies on the Cost of Living Index in Woman Head Households: Social Accounting Matrix Approach

Abstract

Cutting public subsidies like fuel subsidy or changing in payment method will have different impacts on each social group. Subsidy targeting is able to decrease consequences of this policy. Now, in a possible situation to classify the households according to their socio-specific characteristics like gender and head and identify the poverty groups, the government can provide subsidy for that specific group. Statistics show that female-headed households, due to the limitations and barriers to the labor market suffer from various aspects of poverty. Our main purpose in this article is, first of all, to classify the household groups into male and female heads within the social accounting matrices for the year 2009 and 2011. The results show that the average cost of living index of households decreases from 0.055 in 2009 to 0.048 in 2011. This means that by reducing the subsidy by one unit, households in 2011 compared to 2009 should pay 0.007 less for the same consumption basket. Also, the average of female-headed household cost of living index decreases from 0.070 in 2009 to 0.046 in 2011. More decrease of the mentioned index indicates more poverty for this group.

Keywords

• social accounting matrix
• cost of living index
• women headed households