Analysis of the effect of income on goods smuggling in Iran

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Mofidi Zad Mehdi; Paytakhti Skoi Seyyed Ali; Aleemran Roya

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Journal Paper

Paper Information

Journal: اقتصاد و بانکداری اسلامی Year:2024 | Volume:13 | Issue:47 Page(s): 195-215

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Title

Analysis of the effect of income on goods smuggling in Iran

Author(s)

Mofidi Zad Mehdi | Paytakhti Skoi Seyyed Ali | Aleemran Roya | Issue Writer Certificate

Keywords

Goods Smuggling

Iran Economy

Bayesian Econometrics

income

Abstract

Today, smuggling of goods is one of the basic economic problems in all countries of the world, especially in developing countries. In the meantime, due to its special geographical location and due to the fact that it has always been the bridge of trade between different countries, Iran has always seen an increasing growth of smuggling. Based on this, many policymakers are always looking for solutions to deal with smuggling. On the other hand, income is one of the main causes of development, and its low level can lead to many problems, such as increasing crime, deterioration of health, and so on. One of the economic crimes that low income can increase is smuggling. Because if people cannot earn enough income through legal ways, they are more likely to turn to illegal ways such as smuggling. Therefore, the aim of this study was to investigate the effect of income, among other factors, on smuggling of goods in Iran during the period of 1375-1401 by using Bayesian Model Averaging (BMA) and Ordinary Least Squares (OLS) methods. The results indicate that income has a negative and significant relationship with smuggling. In addition, trade openness and added value of industrial sector also have a negative and significant relationship with smuggling. In contrast, the variables of difference between official and unofficial exchange rates, taxes, government size, tourism, mortality and communication have a positive and significant relationship with Goods Smuggling in Iran.

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