Distributional Effects of Oil Price Changeson Household Expenditures: Evidence From Mali
March 1, 2006
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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.
Subject: Commodities, Energy subsidies, Expenditure, Inflation, Oil, Oil prices, Prices
Keywords: Africa, CIF import price, electricity price, Energy subsidies, expenditure effect, factor price, food price hike, household welfare, Inflation, input-output analysis, Oil, oil price hike, Oil prices, oil product, output price, price, producer price change, refined oil price, subsidies, supplier price, World oil price, WP
Pages:
33
Volume:
2006
DOI:
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Issue:
091
Series:
Working Paper No. 2006/091
Stock No:
WPIEA2006091
ISBN:
9781451863512
ISSN:
1018-5941
