Distributional Effects of Oil Price Changeson Household Expenditures: Evidence From Mali

Kangni Kpodar

No 2006/091, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; price; oil product; oil price hike; Oil; subsidies; input-output analysis; household welfare; expenditure effect; output price; electricity price; supplier price; food price hike; CIF import price; refined oil price; World oil price; producer price change; factor price; Oil prices; Inflation; Energy subsidies; Africa (search for similar items in EconPapers)
Pages: 33
Date: 2006-03-01
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Citations: View citations in EconPapers (23)

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