 The economy-wide impact of cooking oil subsidy reforms and compensation to the oil palm industryJing Jing Liu, Norlida Hanim Mohd Salleh and Nor Ghani Md Nor Journal of Policy Modeling, 2024, vol. 46, issue 6, 1228-1242 Abstract: This study analyses the economy-wide impact of cooking oil subsidy reforms using two simulations: complete subsidy removal and compensation for the oil palm industry. The study focuses on macroeconomic variables, industrial output, and employment. A Computable General Equilibrium model is used for analysis. The study found that complete subsidy removal leads to negative impacts on the macroeconomy, causing a slight decrease in economic growth. It also results in negative impacts on industrial output and employment. On the other hand, reallocating the revenue to the oil palm industry investment could mitigate these adverse effects, and further leads to an increase in economic growth. The reallocation improves the output of the oil palm industry and reduces its labour demand. The impacts on other industries' output and employment vary. Removing cooking oil subsidy can be a viable option because of its marginal impacts. It's also recommended to compensate the oil palm industry, especially independent smallholders. Keywords: CGE; Cooking oil; Economy-wide impact; Industry; Subsidy reform (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:46:y:2024:i:6:p:1228-1242 DOI: 10.1016/j.jpolmod.2024.05.008 Access Statistics for this article Journal of Policy Modeling is currently edited by A. M. Costa More articles in Journal of Policy Modeling from Elsevier |
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