The Cost of a Revolution
Iran Nameh: A Quarterly Journal of Iranian Studies, Forthcoming
31 Pages Posted: 12 Sep 2012 Last revised: 16 Nov 2015
Date Written: October 1, 2014
I attempt to quantify the economic opportunity cost of 1979 Iranian revolution and the subsequent policies adopted by the Islamic Republic for the average Iranian citizen.Based on the difference between the actual outcomes of Iranian economy in 1979-2010 period against a set of carefully chosen counterfactuals, I construct a measure for cumulative opportunity cost/gain. Some of these counterfactual scenarios are based on the performance of the Iranian economy over the pre-revolution years, while others are based on the actual performance of economies of Iran’s regional neighbors. My results indicate a substantial opportunity cost in the form of loss in per capita real GDP ranging between 50% to 25% of annual income.
Keywords: Counterfactual analysis, Markov chain simulation, real per capita GDP, Iran, MENA region
JEL Classification: E17, F39, O11
Suggested Citation: Suggested Citation