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Objective: The purpose of this research was to determine expenditure distribution and inequality changes in Tehran. It separately explored expenditures distribution for health, education, and food in rural and urban areas from 1989 till 2006. Method: Using Household Expenditure Survey conducted by Statistical Center of Iran, expenditure distribution and inequality changes for urban and rural areas in Tehran and whole of the country within the time span of 1989 to 2006 were calculated. Gini Coefficient and Theil's Index were calculated and the results were compared. Findings: Inequality in health and education expenditures are too severe (Gini=0.6-0.8) but, food and gross distribution expenditure are more equal (Gini=0.3-0.4). There was a significant difference between urban and rural areas in Tehran for gross expenditures. Heath expenditures distribution in urban of country was more equitable than Tehran, but in rural areas, there was an adverse condition. Regarding education expenditures, there was only a significant difference between rural areas in Tehran and whole of the country that means distribution expenditure in whole of the country in more equitable. Conclusion: With respect to the calculated indices, there are severe inequality in health and education expenditures both in Tehran and whole of the country, but a nearly equitable distribution about food and gross expenditures. These results show that food expenditures have a significant relationship with gross expenditures and therefore, food expenditure shows the real consumption of the households. For these, policymakers have to pay more attention to health and education expenditures in targeting subsidies.

Keywords: consumption expenditures, education, food expenditures, Gini coefficient, health, inequality, Theil index.

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