Impact of Rising Energy Prices on Consumer’s Welfare: A Case Study of Pakistan
Muhammad Rizwan Yaseen and
Additional contact information
Shamaila Aziz: MPhil Student, Department of Economics, Government College University, Faisalabad
Muhammad Rizwan Yaseen: Assistant Professor, Department of Economics. Government College University, Faisalabad
Sofia Anwar: Professor and Chairperson, Department of Economics, Government College University, Faisalabad
The Pakistan Development Review, 2016, vol. 55, issue 4, 605-618
This work investigated the impact of higher energy prices on consumer’s welfare for the Pakistan from 1987 to 2012. The central objective of the study is to quantify the consumer welfare through Compensating Variation (CV) after estimating the demand elasticities by applying the Linear Almost Ideal Demand System (LA/AIDS) for main energy sources. Welfare change is also measured in four scenarios (two price shocks) for Pakistan in order to analyse the impact of energy price change in different time period. Coal, gasoline and High Speed Diesel (HSD) oil are relatively less elastic, where High Octane Blended Component (HOBC), kerosene and Compressed Natural Gas (CNG) are relatively more elastic, while electricity and natural gas is unit elastic. Additionally, the results of Compensating Variation suggest that due to higher energy prices, more income compensation is required to pay for consumer in order to achieve the initial energy utility. So mixture of price controlling and income policies should be adopted for each energy source.
Keywords: Rising Energy Prices; Consumer Welfare; LA/AIDS; CV; Time Series Data (search for similar items in EconPapers)
JEL-codes: D6 Q4 (search for similar items in EconPapers)
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pid:journl:v:55:y:2016:i:4:p:605-618
Access Statistics for this article
More articles in The Pakistan Development Review from Pakistan Institute of Development Economics Contact information at EDIRC.
Series data maintained by Khurram Iqbal ().