Estimating the demand function for payment of Isfahan Municipality renovation fee slips in the same period of 1404 and 1405

mostafa najari¹ sude bagheri rizi² zahra taheri nasab³

1) Head of Revenue Follow-up Department of Isfahan Municipality
2) Isfahan Municipality Revenue Expert
3) Isfahan Municipality Shareholder

IOI Code : ABKD-ABKGEG
Publication : Fourth International Conference on applied researches in civil engineering, architecture and urban planning (icarcau.com)
Abstract :
    Estimating the Payment Demand Function for Urban Renewal Charge Bills in Isfahan Municipality: A Comparative Analysis of 2025 and 2026 The sustainability of municipal finance and the expansion of local revenue capacity require a systematic understanding of taxpayers payment behavior and their responses to changes in the effective amount payable. Urban renewal charges constitute an important recurring source of municipal revenue. However, their collection is not determined solely by statutory rates and is also influenced by arrears, payment conditions, financial incentives, information policies, and citizens willingness to settle outstanding obligations. This study estimates the payment demand function for urban renewal charge bills in Isfahan Municipality during comparable periods of 2025 and 2026. The principal methodological feature of the study is that the payment bill is defined as the unit of analysis, rather than treating its individual components as separate dependent or explanatory variables. The bill includes urban renewal charges, waste service charges, rail transportation charges, and arrears. Accordingly, the final bill amount is treated as the effective payment amount. During the first quarter of 2026, the base tariff structure was maintained at the 2025 level, while a 30 percent discount was applied to the effective payment amount. The number of paid bills increased from 25,666 in the comparable period of 2025 to 46,196 in 2026, representing an 80 percent increase. Total receipts increased from 938 billion rials to 2,397 billion rials, equivalent to a 156 percent increase By normalizing the effective policy amount at 100 without the discount and 70 after the 30 percent discount, the following linear payment demand function was derived: Q = 94099.33 - 684.33P where Q denotes the number of paid bills and P denotes the effective policy amount index. The estimated relationship indicates an inverse association between the effective payment amount and payment participation within the observed interval. Nevertheless, because the bill includes both current charges and arrears, the observed increase in total receipts cannot be interpreted as a pure causal consequence of price changes or discounts. The findings suggest that municipal discount policies should be evaluated through the interaction between payment participation, effective payment amounts, and total revenue rather than through nominal collection figures alone. Keywords: Urban renewal charges; municipal charges; payment demand; payment behavior; price elasticity; discount policy; municipal revenue; urban public finance; Isfahan Municipality.

Keywords : renovation fees toll slips demand function payment behavior price elasticity discount urban income urban tax