The Effects of COVID 19 on GDP and Income Distribution through the Transportation Services using the Partial Hypothetical Extraction Method

Document Type : Original Article

Authors

1 Economics Faculty, Allameh Tabataba'i University

2 Management Faculty, Kharazmi University

3 Faculty of Economics, Allameh Tabataba'i University

10.22034/tri.2021.253350.2820

Abstract

Following the contiguous of Corona Virus (COVID 19), transportation services are facing a significant decline due to the implementation of social distancing plan, bans on unnecessary travels, increasing public concerns about the high risk of using public transport services and the closure of some businesses. Therefore, the transportation sector became one of the most vulnerable economic sectors due to these events. In this article, using the partial hypothetical extraction method in the framework of the newly constructed social accounting matrix (SAM) for 2016, the effects of contiguous of COVID 19 on the economic activities and income distribution have been investigated using two scenarios. The first is a one-month shutdown of 4 subsectors of transportation services and the second is the continuation of the current situation during the current year. The overall results are as follows: One- in the case of first scenario, due to partial extraction of 4 subsectors of transportation, output, GDP, urban households and rural households incomes will decrease by 0/604, 0/608, 0/648 and 0/691 percent respectively, whereas for the second scenario, the corresponding figures will be 4/370, 4/349, 4/650 and 4/915 percent respectively. Second- “wholesale and retail”, “manufacturing of coke and petroleum products”, “crude oil and natural gas”, “manufacturing of food products”, “services of private real estates” and “livestock” are identified to be the most vulnerable sectors.

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