Energy Subsidies and Energy Consumption: A Cross-Country Analysis
IMF Working Papers, May 16, 2013
Source details
- Canonical URL
- Energy Subsidies and Energy Consumption: A Cross-Country Analysis
Other formats
Bibliographic details
- Authors: Joshua Charap, Arthur Ribeiro da Silva, Pedro C Rodriguez
- Published: May 16, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484367247.001
Summary
- Research objective: analyze a panel of cross-country data to explore the responsiveness of energy consumption to changes in energy prices and implications for energy subsidy reform.
- Core finding: long-term price elasticity of energy demand between -0.3 and -0.5.
- Short-term finding: short-term gains from subsidy reform are likely to be much smaller.
- Policy suggestion from authors: consider either a gradual approach to subsidy reform or provide more generous safety nets in the short term.
Key findings and quantitative results
- Long-term price elasticity of energy demand: between -0.3 and -0.5.
- Short-term effects: quantitatively smaller than long-term effects (exact short-term elasticity values not reported on the landing page).
Policy implications and recommendations
- Reform of energy subsidies can yield significant long-term benefits given estimated long-term elasticities.
- Because short-term gains are likely to be much smaller:
- Adopt a gradual approach to subsidy reform, or
- Provide more generous safety nets during the transition period.