The Impact of Trade Liberalization on Persian Rugs: A Policy Analysis Matrix Approach

Persian rugs are woven in different parts of the Islamic Republic of Iran. However, the rugs woven in Eastern Azerbaijan, Esfahan, and Qum have a worldwide reputation. A poliy Analysis Matrix (PAM) is used to study the rug industry in these provinces. Our analysis is concentrated on the most-exported hand-woven rug-named 65-Radj Cheleh Abrishami Silk Flower-using 2006 data. The results indicate that the export competitive indexes for the three provinces are 0.81, 0.88, and 0.93, respectively. Based on these indices the 65-Radj Cheleh Abrishami Silk Flower rug can compete in the world markets. The comparative advantage indices for the three provinces are 0.83, 0.79 and 0.84, respectively. These numbers show that the provinces have a comparative advantage in the production of the rug in question.