Understanding the distributional impacts of increases in fuel prices on poverty and inequality in Paraguay

Gustavo Canavire-Bacarreza, Lyliana Gayoso de Ervin, Juan José Galeano () and Juan Pablo Baquero ()
Additional contact information
Juan José Galeano: Ministerio de Hacienda, Gobierno de Paraguay
Juan Pablo Baquero: Boston College

Revista Latinoamericana de Desarrollo Economico, 2023, issue 39, 77-108

Abstract: The recent global increases in fuel prices threaten the gains in poverty reduction that countries like Paraguay have achieved in the last few decades. Because of this, policy makers must understand the potential distributional impacts of increases in fuel prices to evaluate the implementation of alternative measures that could mitigate these impacts. In this paper, we analyze the potential effects of increases in fuel prices on poverty and inequality in Paraguay. Using microsimulation methods and based on the Commitment to Equity (CEQ) framework, we estimate the impact of higher fuel prices on welfare, poverty, and inequality based on three scenarios: (a) increases in gasoline prices, (b) increases in diesel prices, and (c) simultaneous increases in gasoline and diesel prices. The results obtained suggest that the total impact of increasing fuel prices tends to be more regressive in Paraguay. At the same time, the results of our simulations indicate small positive effects on income inequality.

Keywords: fuel prices; poverty; inequality; Paraguay (search for similar items in EconPapers)
JEL-codes: D60 I30 P36 Q40 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://lajed.ucb.edu.bo/a/article/view/280/487 Full text (application/pdf)

Related works:
Working Paper: Understanding the Distributional Impacts of Increases in Fuel Prices on Poverty and Inequality in Paraguay (2023)
Working Paper: Understanding the Distributional Impacts of Increases in Fuel Prices on Poverty and Inequality in Paraguay (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:revlde:2008

Access Statistics for this article

Revista Latinoamericana de Desarrollo Economico is currently edited by Carlos Gustavo Machicado

More articles in Revista Latinoamericana de Desarrollo Economico from Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo" Universidad Católica Boliviana "San Pablo", Av. 14 de septiembre 4836. Obrajes, La Paz, Bolivia. Contact information at EDIRC.
Bibliographic data for series maintained by Carlos Gustavo Machicado ().