Geography and Urban Research

Investigating the relationship between oil revenues and housing prices with the expansion of informal settlements in Mashhad metropolis (with the Dutch disease hypothesis approach)

Document Type : Original Article

Authors

Saleh Ebrahimipour 1
katayoon alizadeh 2

1 a. Ph.D. Candidate, Department of Geography, Islamic Azad University, Mashhad, Iran.

2 b. Associate Professor, Department of Geography, Islamic Azad University, Mashhad, Iran.

https://doi.org/10.22130/gur.2026.2087145.1043
Abstract
The expansion of informal settlements is one of the most significant consequences of structural inequalities in the cities of developing countries, and its roots can be traced to macroeconomic transformations. The present study was conducted with the aim of explaining the relationship between oil revenues, housing prices, and the expansion of informal settlements in Mashhad metropolis, employing an approach to test the Dutch Disease hypothesis. This research is applied in terms of purpose and descriptive-analytical in terms of method, carried out with a mixed-methods approach utilizing quantitative and qualitative data over the period 2001 to 2021. The statistical population included the informal settlements of Mashhad, comprising 8 zones and 67 neighborhoods, from which four indicator neighborhoods were selected through purposive sampling. Quantitative data were collected from official national and local sources and analyzed using normality tests, correlation, regression, Granger causality, and Johansen cointegration tests. Qualitative data were also gathered through semi-structured interviews and examined using thematic analysis. The results indicated that the real value of the country's oil revenues experienced a significant decline during the study period, while simultaneously, housing prices in Mashhad experienced a very sharp growth. Statistical analyses confirmed the existence of a positive and significant relationship between oil revenues and housing prices, as well as between housing prices and population growth in informal settlements. Furthermore, causality and cointegration tests suggested the existence of a long-term relationship between oil revenues and the housing market. Qualitative findings also revealed that high housing costs are the most significant factor driving low-income households towards informal settlements, and a considerable portion of their income is spent on housing expenses. Accordingly, this study confirms the causal chain of "oil revenues leading to an increase in housing prices and consequently, an expansion of informal settlements." The results indicate that liquidity management during oil boom periods, implementation of counter-cyclical policies in the housing market, targeted financial support for low-income groups, and empowerment programs for informal settlements can play an effective role in mitigating this phenomenon.

Keywords

Oil Revenues
Housing Prices
Informal Settlements
Dutch Disease
Mashhad Metropolis
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Geography and Urban Research
Volume 3, Issue 1
Winter 2026
Pages 15-37

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