Document Type : Research Paper

Authors

• Mohammad Mahdi Abdi ¹
• mohamad solimani ²

¹ Faculty of Islamic Studies and Economics, Imam Sadiq (A.S.) University, Tehran, Iran

² faculty of islamic studies and economics imam sadiq university

Abstract

Measuring inequality and investigating the distributional consequences of policies is a main prerequisite for policy making in the area of inequality; furthermore, answer of this question that "Is a limit of inequality justifiable? If so, by what analysis and to what extent?" requires a theory of justice and an index that should be based on the society values. This research after criticizing theoretical foundations of conventional indexes of income inequality and presenting the Islamic definition of "Consumption Balance" (Tawaazun; the range between poverty and extravagance) as an alternative, introduce a measure which is in accordance with this definition: The proportion of poverty and extravagance to the consumption of society. Then we use this index for measuring unjustifiable inequality (consumption imbalance) of Iran’s economy, and estimating the effect of Islamic tax (Khums) on it. Estimations express increasing trend of consumption balance in studied years and much more increase of it in case of khums execution.

Keywords

• Index
• Inequality
• Balance
• Khums
• Poverty