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| 1 |
ID:
183609
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| Summary/Abstract |
One of the pertinent concerns that Pakistan is facing nowadays is the ever-increasing demand for energy. The government of Pakistan has been reducing subsidies on commercial fuels due to mounting fiscal burden and fluctuating oil prices. This study analyzes the distributional impact of phasing out residential electricity subsidies on household welfare. The direct, as well as indirect effects of phasing out electricity subsidies, have been estimated. The results suggest that a rise in the prices of electricity causes a significant decrease in the real expenditure of households in all expenditure quintiles. However, the decline is greater for the relatively affluent households than the relatively poor households implying that the benefit of introducing electricity subsidies would be regressive. The results also show that the indirect effect of subsidy removal is far greater as compared to the direct effect. Electricity prices rise due to subsidy removal would increase the price of other goods, which will ultimately result in cost-driven inflation with some lags. Hence, the government must focus on the indirect subsidy reform effects accompanied by a more cost-effective policy to protect the poor.
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| 2 |
ID:
166700
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| Summary/Abstract |
Using a three-round panel dataset of more than 3,000 households, the paper estimates the impacts of electricity reliability improvement on the welfare and economic decisions of rural Vietnamese households. The number of days without power outages in communes per annum is used to proxy for electricity reliability. We employ a fixed effect regression with an instrumental variable to deal with the endogeneity issue, led by the simultaneous causal relationship between the reliability of electricity and household outcomes along with the unobservable variables. We use the similar electricity quality variable but measured in other communes within the same province as an instrumental variable. Results from this model show that an improvement in electricity reliability plays an important role in enhancing incomes, durable consumption, access to credit and land investment decisions of rural households.
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| 3 |
ID:
114323
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| Publication |
2012.
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| Summary/Abstract |
Energy prices in Iran have traditionally been heavily subsidized by the Government, and as a result, energy consumption per capita in Iran is close to the European Union level. The welfare effects of efforts to raise energy prices closer to world levels are examined in this paper. Reform of energy prices is an important element of the "Economic Reform Plan" (2010-2014) for Iran. We first analyze the relationship between energy consumption, energy and non-energy prices by estimating the household expenditure function. The results show that a higher energy prices will decrease energy consumption by Iranian households. Second, we evaluate the impact of a rise of energy prices on the household welfare by measuring the compensating variation (CV) in five steps with a compensating payment. The results show that Iranian household welfare will increase with a 100% or 200% rise in energy prices, if the government pays 20%, 30% or 50% of the $20 billion income resulting from removing energy subsidies. While, in contrast, Iranian household welfare will decrease with a 400% and 500% rise in energy prices, if the government payment is 20% or 30% of $20 billion income.
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| 4 |
ID:
190587
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The adoption and use of electronic appliances generally contribute to higher productivity and thus are key to ameliorate living standards of rural households. A wide range of decentralized electricity systems has been used to power remote parts of Nepal. How these systems facilitate the adoption of electronic appliances, is a question under explored in the existing energy policy literature. This study bridges this gap by comparing the electronic appliance adoption among households that use micro-hydropower and solar home systems against traditional lighting solutions and grid electricity in Nepal. Applying the two-stage least-square method to data from Nepal's population and household census of 2011, we found solar home systems do not increase the use of high-wattage electronic appliances such as televisions and fridges when compared to kerosene, but micro-hydro plants and grid electricity do. This finding indicates that low-capacity electricity sources like solar home systems appear to be limited to facilitate the adoption of high-wattage electronic appliances. It is recommended that energy access policies should look beyond providing basic access to electricity for lighting and prioritize the provisioning of electricity sources that support the use of high-wattage electricity appliances.
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| 5 |
ID:
184217
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| Summary/Abstract |
This paper reassesses the impact of the residential electricity tariff reform implemented in 2012 on the distributional equity and fiscal cost of electricity subsidies in Brunei. Using data from the latest Household Expenditure Survey (HES) conducted in 2015/16, the study estimates that the poorest 20 per cent of households receive 18 per cent of total electricity subsidies, which is considerably larger than the previously estimated share of 11 per cent based on the 2010/11 HES data. This, in part, reflects behavioural changes induced by the reform to an increasing block tariff (IBT), as wealthier households reduce their electricity usage due to higher per-unit costs at higher levels of consumption while poorer households increase their usage as the tariff cost is cheaper in the first consumption block. Concomitantly, the fiscal cost of electricity subsidies has declined by more than 20 per cent following the tariff change. Yet, simulations of alternative reform scenarios show that there are substantial welfare gains and cost savings from refining the IBT structure, using a volume-differentiated tariff, or providing targeted cash transfers. The overarching message is that improving the design of subsidy schemes or introducing targeted transfers can achieve distributional equity and fiscal objectives more efficiently than existing electricity subsidies.
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