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The Price Impact of Energy Vouchers
[L'impact sur les prix des chèques énergies]

Author

Listed:
  • Marion Podesta

    (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique)

  • Jean-Christophe Poudou

    (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier, UM - Université de Montpellier, Labex Entreprendre - UM - Université de Montpellier)

  • Michel Roland

    (CREATE - ULaval - Université Laval [Québec], ULaval - Université Laval [Québec])

Abstract

France and South Korea have implemented voucher programs to counter energy poverty. In contrast to goods that traditional voucher programs target, the market structure that dominates energy supply is the oligopoly. In this paper, we study the price impact of vouchers in this market structure. We first state conditions on demand elasticities that make the choice of vouchers consistent with the regulator's objective of eliminating energy poverty. We then model a game between energy suppliers and the regulator, where suppliers maximize profit while the regulator ensures that no consumer spends more than a given share of income on energy. From a benchmark case without vouchers, we show that vouchers reduce the energy price under simultaneous decision making or when the regulator moves first. However, the price impact of vouchers is ambiguous if firms move first. This scenario's price is above the price of the simultaneous decision scenario's price.

Suggested Citation

  • Marion Podesta & Jean-Christophe Poudou & Michel Roland, 2021. "The Price Impact of Energy Vouchers [L'impact sur les prix des chèques énergies]," Post-Print hal-02567375, HAL.
    • Handle: RePEc:hal:journl:hal-02567375
    DOI: 10.5547/01956574.42.3.mpod
    Note: View the original document on HAL open archive server: https://hal.umontpellier.fr/hal-02567375
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    References listed on IDEAS

    as
    1. Poudou, Jean-Christophe & Roland, Michel, 2017. "Equity justifications for universal service obligations," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 63-95.
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    Cited by:

    1. Richard S. J. Tol, 2023. "Navigating the energy trilemma during geopolitical and environmental crises," Papers 2301.07671, arXiv.org.

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    More about this item

    Keywords

    Energy Poverty; Vouchers; Oligopoly; Regulation;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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