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The main object of any rational human being is a better standard of living, peace and welfare. Looking at the past, the history of nations around the world shows that most of them have been successful in achieving this goal and the standard of living and welfare of people in most countries has considerably raised. This article seeks to survey the poverty of Iranian households during the last two decades (1983-2003). For this purpose, the authors have gathered and calculated the deflated states of households' expenditure and income published by Iran Statistical Center Yearbooks. The results show that the real consumption of households has decreased during some twenty past years and both rural and urban families have become poorer. Although the Engel's theory indicates that the share of consumed amount of food stuff in the households' budget decreases when the income is increasing, the paper proves that the declining share of expenditure for food of Iranian households is not the evidence of better economic situation.

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  Introduction: The Health is Regarded as one of the various forms of human capital and affects labor earnings in different ways. since people work as manual labor and remote than industrial equipments in rural regions, the health of rural households is very important. since the aim of development strategies is to augment the social welfare, this paper is organized to study the effect of health on social welfare. For this purpose, the Rawlsian approach to social welfare is selected to investigate the effect of peasants' health on social welfare in Iran.

  Method: The relationship between health and those factors which affect the productivity and hence income of peasants is the core of theoretical discussions. deductive reasoning is used to study the effect of peasants' health on their income and hence on social welfare in Iran. At last, it is tried to present empirical evidence to test hypothesis.

  Findings: On the basis of above mentioned approach, this hypothesis has Found that improvement of peasants' health has increased the social welfare in Iran. based on Russet et al. (1981) who estimated the effect of health on income inequality, regression equations are used to test proposed hypothesis. The dependent variable in regressions is annual average income of a typical rural household and the index of health is both monthly expenditures of a rural household in health and the number of medical centers in rural areas. relevant data that is used to estimate regressions have gathered for 1361-82 period. The method of estimation is generalized method of moments (GMM).

Discussion: This study is about the effect of rural households' health on their incomes and by using the regression analysis show that rural households' health has significantly and positively related with their incomes in last two decades and hence according to Rawlsian welfare improvement measure, has increased social welfare in Iran. This result confirms the proposed hypothesis and so suggests that increase in health of peasants and expansion of medical equipments toward rural regions bring about the level of social welfare and hence development move up. Consequently, the policy implication of this paper implies more attention of policy makers to development of rural regions as providing the basic services such as health