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The Opportunity Cost of the Islamic Revolution and War for Iran

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  • Mohammad Reza Farzanegan

    () (Philipps-Universitaet Marburg)

Abstract

We estimate the opportunity cost for Iran due to the Islamic revolution and eight years’ war with Iraq (1978/79-1988). We apply the synthetic control method in order to compare Iran with a synthetic Iran and answer this counterfactual question. Our results show that, in total, an average Iranian has lost $34,660 (in constant 2010 US$) from 1978 to 1988. This loss is equivalent to 40% of income per capita, which an Iranian could reach at the absence of revolution and war.

Suggested Citation

  • Mohammad Reza Farzanegan, 2019. "The Opportunity Cost of the Islamic Revolution and War for Iran," MAGKS Papers on Economics 201929, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201929
    as

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    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/paper_2019/29-2019_farzanegan.pdf
    File Function: First 201929
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    References listed on IDEAS

    as
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    5. Samer Matta & Simon Appleton & Michael Bleaney, 2019. "The Impact of the Arab Spring on the Tunisian Economy," World Bank Economic Review, World Bank Group, vol. 33(1), pages 231-258.
    6. Horiuchi, Yusaku & Mayerson, Asher, 2015. "The Opportunity Cost of Conflict: Statistically Comparing Israel and Synthetic Israel," Political Science Research and Methods, Cambridge University Press, vol. 3(3), pages 609-618, September.
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    8. Kaul, Ashok & Klößner, Stefan & Pfeifer, Gregor & Schieler, Manuel, 2015. "Synthetic Control Methods: Never Use All Pre-Intervention Outcomes Together With Covariates," MPRA Paper 83790, University Library of Munich, Germany.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    synthetic control method; treatment effect; Iran; war; revolution;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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