Iranians' Expenditure on Leisure and Recreation Shrinking

Travel and other leisure activities constitute one-fifth (20%) of household expenditures.Travel and other leisure activities constitute one-fifth (20%) of household expenditures.

Benefits of leisure activities are associated with good health and satisfaction in life, and the contribution of outdoor recreation to healthy living can be considered in the context of ‘wellness.’

The World Health Organization (WHO) defines health as a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.

In other words, optimal health involves a delicate balance among physical, emotional, spiritual, intellectual and social health. Outdoor recreation and travelling touches on all aspects of health and can enhance not only physical health but also emotional wellbeing.

The per capita recreation expenditures of an Iranian family constitute 4% of the total household expenditures, reported, noting that urban families have 3.3 members on average.

According to the latest report by the Central Bank of Iran, the gross expenditure of an urban household stands at $700 (28 million rials) per month, which means an average Iranian household spends $360 (14 million rials) per year for outdoor recreation, including going to restaurants, staying in hotels, or traveling.

The figure is four times higher in western Europe and the US. In neighboring Turkey, and Russia, people’s expenditure on leisure activities accounts for 10% of their total household expenses (2.5 times higher than Iran).

“On the other hand, even in our country the figure is not the same for all classes of the society.  Travel and other activities of leisure constitute one-fifth (20%) of household expenditures for the 5% richest people in the country (in particular the top 1%),” according to a recent study jointly released by Hussein Raghfar, a respected economist and faculty member at the prestigious Alzahra University, and Ehsan Soltani, economic researcher.

The study found out that 39% of all leisure expenditure in the country is also attributed to 10% of the richest people (the ten highest incomes) and the share of the lowest deciles is a pitiful 0.6%, the two researchers said.

In 2015, the figure was 19%, 13%, 9%, 7%, 5%, 4%, 2%, and 1% for eight deciles lower than the highest income decile, the report said. In the past decade, the country has undergone significant economic hardships that have severely affected leisure activities of many households.

  Widening Rich-Poor Divide  

“During the last decade, the gap in spending on outdoor leisure activities including staying in hotels and going to restaurants between the rich and poor Iranians increased 10-fold,” they said.

In 2005, the expenditure of the highest income decile on two leisure activities, i.e. staying in hotels and going to restaurants were 28 and 42 times higher than that of the lowest income decile, respectively.  In 2015, the figures increased to 63 and 83 times.

“Currently half (50%-53%) of household spending of lower income deciles goes for housing, as many people don’t own the homes they live in. The figure was 35% a decade when the former president Mahmoud Ahmadinajad took office (2005-2013).”

“It needs mention that an average Iranian household’s expenditure on housing is higher than both developing and developed countries,” the researchers said.

They were of the opinion that the problem of the rich-poor gap can be addressed by taking different measures, one of which can and should be the cutting of interest rates on bank deposits and loans.

The two economists and their peers argue that if rates are cut, those with large deposits and “idle money” would be compelled to pull out their money and invest in business and manufactures while those wanting to expand their business can borrow at lower rates.  This would help the economy grow, create much-needed jobs and by extension improve the living standard of the poor.

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