Household’s Welfare Impact of Fuel Subsidy Removal

Tri Widodo (kociwid@yahoo.com)

MPRA Paper from University Library of Munich, Germany

Abstract: This paper aims to analyze the energy subsidy removal on the households’ welfare in Indonesia. First, we will model theoretically the welfare change measurement. In this paper, we will apply Compensating Variation (CV) and Equivalent Variation (EV) under Linear Expenditure System (LES). Second, we will estimate empirically the model by using National Social Economic Survey (Survei Sosial Ekonomi Nasional, SUSENAS) and Cost of Living Survey (Survei Biaya Hidup) data. Third, by using the estimated CV and EV, we will simulate the impacts of the energy subsidy removal on the households’ welfare. The CV and EV can be considered as the compensation should be given to the poor households.

Keywords: Welfare Measurement; Compensating Variation (CV) and Equivalent Variation (EV); Linear Expenditure System (LES) (search for similar items in EconPapers)
JEL-codes: C5 D11 D12 D6 (search for similar items in EconPapers)
Date: 2012-06-28
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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