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Distributional Effects of Oil Price Changes on Household Expenditures: Evidence from Mali

Author/Editor: Kpodar, Kangni
Authorized for Distribution: March 1, 2006
Electronic Access: Free Full Text (PDF file size is 507KB)
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: Using an input-output approach, this paper assesses the distributional effects of a rise in various petroleum product prices in Mali. The results show that, although rising gasoline and diesel prices affect mainly nonpoor households, rising kerosene prices are most harmful to the poor. Overall, the impact of fuel prices on household budgets displays a U-shaped relationship with expenditure per capita. Regardless of the oil product considered, highincome households would benefit disproportionately from oil price subsidies. This suggests that a petroleum price subsidy is an ineffective mechanism for protecting the income of poor households compared with a targeted subsidy.
 
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Series: Working Paper No. 06/91
Subject(s): Oil prices | Mali | Income distribution | Oil subsidies
Author's keyword(s): Oil; subsidies; input-output analysis; household welfare
 
English  
    Published:   March 1, 2006        
    ISBN/ISSN:   0 / 1934-7073   Format:   Paper
    Stock No:   WPIEA2006091   Pages:   33
    Price:   US$15.00 (Academic Rate: US$15.00 )
       
     
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