The Impact of Income Inequality and Economic Pressure on Charitable Behaviors in Iran: A Panel Threshold Approach

Articles in Press

Document Type : Original Article

Author

Mostafa Kazemi Najaf Abadi

Associate Professor, Research Institute of Howze and University

https://doi.org/10.22067/erd.2026.94468.1308

Abstract

This study investigates the effects of income inequality and economic pressure on charitable behavior across Iranian provinces during the period 2010–2023, utilizing provincial panel data. The research employs fixed-effects threshold panel regression models, which allow for the identification of nonlinear relationships and critical threshold points of macroeconomic variables. The dependent variable—charitable behavior—is operationalized through the number of active non-governmental organizations (NGOs) in each province, serving as a proxy for social participation in charitable activities. Income inequality is measured using the provincial Gini coefficient, while economic pressure is represented by a composite indicator comprising the unemployment rate, point-to-point inflation rate, and consumer price index (CPI). The results indicate optimal threshold values of 0.386 for income inequality and 1.12 for economic pressure. The impact of both variables on charitable participation is statistically significant and negative in two distinct regimes, with substantially intensified effects in the second regime—beyond the estimated thresholds. Specifically, the marginal effect of income inequality reaches –0.31 in the high-inequality regime, and economic pressure shows a coefficient of –0.27 in the high-pressure regime. Additionally, control variables including the urban population share, provincial GDP per capita, and literacy rate exhibit positive and significant influences on charitable behavior. These findings underscore that surpassing critical thresholds of inequality and economic distress can severely erode social capital and diminish voluntary civic engagement. The study highlights the fragile and nonlinear structure of macroeconomic determinants in shaping charitable behavior in Iran.

Keywords

Income inequality

Economic pressure

Charitable behaviors

Iran

Panel threshold approach

Subjects

• income distribution

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