Energy populism and household welfare

Pedro Hancevic, Walter Cont and Fernando Navajas

Energy Economics, 2016, vol. 56, issue C, 464-474

Abstract: Inspired on experiences observed in certain developing countries, we propose a simple model to explain the emergence of a class of subsidized energy price cycles. It exploits the use of median household's preferences for receiving transfer gains followed by future transfer losses. In our empirical application, we use data on natural gas and electricity prices, taxes, energy consumption, and household characteristics for the Buenos Aires Metropolitan Region during the 2003–2014 period. We provide detailed estimates of the actual transfers, their middle- to high-income bias and the corresponding effects on the level and stability of household welfare of a departure of energy prices from opportunity costs.

Keywords: Energy prices; Distortions; Subsidies; Welfare effects; Populism (search for similar items in EconPapers)
JEL-codes: D78 H22 Q48 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Energy populism and household welfare (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:56:y:2016:i:c:p:464-474

DOI: 10.1016/j.eneco.2016.03.027

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