In the new discussions about sustainable development, there is a high emphasis on human development which would only happen through policies based on more efficient allocation of resources, itself being one of the main issues leading to social justice. One of the policies of the Iranian government in this regard is the Targeted Subsidy plan (TSP). Since the main aim of this plan is to support the vulnerable groups and improve their quality of life, the current study analyzes the changes in the life quality of Iranian rural households after the first stage of the targeted subsidy plan. The methodology of this research is descriptive (survey-based). Using the pseudo-panel method, the life quality of 245 rural households in Ahmadabad region located in Mashhad, Iran, has been investigated from economic, social, and physical-environmental dimensions with 18 variables and 62 indices before and after the Targeted Subsidy Plan. The validity of the questionnaire was substantiated through confirmatory factor analysis (KM≤ 0.87; P ≤ 0.05) and its reliability was found to be high using Cronbach’s Alpha test (0.87). The results of the paired samples t-test indicated that after the implementation of the Targeted Subsidy reform Plan, the life quality of rural households reduced from 3.17 to 2.69 in the social dimension, from 2.79 to 2.45 in the economic dimension, from 3.06 to 2.84 in the physical-environmental dimension and from 3 to 2.54 in the quality of life construct. In other words, after the implementation of the subsidy reform plan, the mean of life quality and all its dimensions have become less desirable compared to the period before this plan. In order to realize justice and increase the efficiency of this plan, it is recommended that the targeted subsidies for the vulnerable groups who mostly live in rural areas (along with high social supports) should replace the public payment of subsidies to all Iranians.

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