Lessons from the pandemic: an interrupted time series analysis of food and non-food household expenditures in Iran

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BACKGROUND: The COVID-19 pandemic disrupted household consumption worldwide. Evidence from middle-income countries remains limited. We examined changes in Iranian household expenditures before, during, and after the pandemic. METHODS: We used nationally representative Household Income and Expenditure Survey data (2014-2023; 381,302 households). Expenditures were CPI-deflated, and interrupted time series regression was applied to six major categories (food, housing, transport, health, education, and other) across three phases: pre-COVID (2014-2019), during COVID (2020-2021), and post-COVID (2022-2023). Budget shares and subgroup analyses (urban-rural) were also examined. RESULTS: Before the pandemic, most real expenditures were declining. At the onset of COVID-19, sharp contractions were observed in transport, health, and non-essential categories, while food and housing remained relatively stable. Education showed no significant immediate decline. In the post-COVID period, food and housing increased but did not return to pre-pandemic trajectories. Health and non-essential spending remained depressed, whereas education recorded a significant but incomplete rebound. Budget shares shifted toward essentials, with food and housing rising, and education and other non-essentials declining. Urban-rural patterns were broadly consistent, although levels were higher among urban households. CONCLUSIONS: The pandemic caused immediate and lasting structural shifts in household spending. Reallocation toward food and housing reflects pressure on discretionary categories such as education and health. Limitations include the absence of detailed income analysis and the overlap with other macroeconomic shocks. Targeted policies are needed to protect vulnerable groups and sustain investment in human capital.

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