A New Approach to Compare the Impact of Direct and Indirect Payments on Regional Macroeconomic Indices

Several procedures have been employed to examine the impacts of subsidies on different indices in an economy. This paper proposes a new approach enabling one to compare direct and indirect payments on households. To this end, the impact of government payments is examined on Gross Regional Products, Employment, Income Distribution and Inflation of Golestan Province in Iran through a Social Accounting Matrix for the year 1993-94. The advantage of this approach is its ability to compare the impact of direct payments and indirect one on the above indices in more detail. The results indicate that direct payments lead to inflation with more influence on comparison with indirect payments.