How Tehran Household Expenditure Compares With Rest of Iran?

Household final consumption expenditure, excluding tax payments and premiums, of those living in Tehran Province, wherein lies the capital city, is about 1.5 times more than those living in other Iranian urban areas.

According to the Central Bank of Iran’s “Household Expenditure Survey”, the average expenditure of Iranian households stood at 393.6 million rials ($9,840) in the last fiscal year (March 2016-17), indicating an 11.4% rise compared with the year before. These expenditures stood at 506 million rials ($12,650) for households in Tehran, registering a 23% rise over the fiscal 2015-16.

With a 35% share, spending on “housing, water, electricity, natural gas and other fuels” accounted for the bulk of the total urban household expenditure in Iran, followed by “food and beverages” with 22.9%; transportation with 10.6%; “other goods and services” with 8.4%; “health and treatment” with 5.9%; “clothing and shoes” with 4.3%; “home appliances” with 4%; “communications” and “restaurants and hotels” with 2.1%; “entertainment and cultural affairs” and “education” with 1.9%; and “tobacco” with 0.3%.

In Tehran, “housing, water, electricity, natural gas and other fuels” constituted 47% of the total expenditure; “food and beverages”17.2%; and “transportation” 9.3%.

The most notable increase of expenditure for average Iranian households was registered for “tobacco” with 19.3%; “transportation” 16.1%; and “restaurants and hotels” 13%.

For households in Tehran spending on “restaurants and hotels” saw the highest increase of 43%; followed by “transportation” with a 40% rise and “tobacco” with a 37% rise compared to the year before.

Gross average income stood at around 392.3 million rials ($9,807), indicating an 11.3% rise compared with the year before. In Tehran, gross average income of households was 591 million rials ($14,775), 15% more than the year before.

The annual survey is undertaken by CBI’s Department of Statistics by collecting information from Iranian households on their expenditure, income, savings, ownership of consumer durables, financial investments and assets.

According to the department, the survey is conducted with the latest updates from the United Nations System of National Accounts and is compatible with the UN Classification of Individual Consumption by Purpose.

The report is known for its large coverage of households (17,543 households) in 79 cities across Iran and is published annually.

One of the notable trends in the 2016 HES report was the increase of net expenditure, in parallel with the rise in net income in Iranian households, after five years of continuous decline.

The increase in spending behavior signals that consumption is preferred over savings for the first time since 2011.