IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa10p157.html
   My bibliography  Save this paper

Energy Policy and Regional Inequalities in the Brazilian Economy

Author

Listed:
  • Gervasio Santos
  • Eduardo Haddad
  • Geoffrey Hewings

Abstract

The objective of this paper is to evaluate the long-run regional impacts of tariff policy of the Brazilian electric power sector. The structural reforms carried on this sector determined the emergence of two different spatial distribution trends of the electric power tariffs among the Brazilian states: one of convergence and another of spatial divergence. The regional dispersion of tariffs is being influenced by the spatial features of the Brazilian economy, which is marked by the high degree of spatial concentration and the hierarchical distribution of large markets on the space. In spite of this, the electric power price differentials in Brazil tend to be determined by the market size differentials, which provide different conditions for gains from economies of scale by the electric power distribution companies. Based on these elements and in the fact that electric power is an important input for the production process, an Interregional Computable General Equilibrium model for energy policy analysis was built. The simulations showed that the input-output linkages, the spatial heterogeneity of the electric power intensity and the regional energy substitution differentials are the main determinants of spatial impacts of electric power price changes in Brazil. On the other hand, the recent trend of spatial divergence of the electric power prices may be contributing to reduce the national real GDP and to increase the regional inequalities in Brazil.

Suggested Citation

  • Gervasio Santos & Eduardo Haddad & Geoffrey Hewings, 2011. "Energy Policy and Regional Inequalities in the Brazilian Economy," ERSA conference papers ersa10p157, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa10p157
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper157.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ramos-Real, Francisco Javier & Tovar, Beatriz & Iootty, Mariana & de Almeida, Edmar Fagundes & Pinto Jr., Helder Queiroz, 2009. "The evolution and main determinants of productivity in Brazilian electricity distribution 1998-2005: An empirical analysis," Energy Economics, Elsevier, vol. 31(2), pages 298-305, March.
    2. Robert-Nicoud, Frédéric, 2004. "The Structure of Simple 'New Economic Geography' Models," CEPR Discussion Papers 4326, C.E.P.R. Discussion Papers.
    3. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    4. P Nijkamp, 1983. "Regional Dimensions of Energy Scarcity," Environment and Planning C, , vol. 1(2), pages 179-192, June.
    5. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
    6. Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2005. "Market imperfections in a spatial economy: some experimental results," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 476-496, May.
    7. Faini, Riccardo, 1984. "Increasing Returns, Non-Traded Inputs and Regional Development," Economic Journal, Royal Economic Society, vol. 94(374), pages 308-323, June.
    8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    9. Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644, Elsevier.
    10. Nijkamp, Peter, 1980. "Energy problems and regional development : Editorial note," Regional Science and Urban Economics, Elsevier, vol. 10(3), pages 299-301, August.
    11. Krugman, Paul & Venables, Anthony J., 1996. "Integration, specialization, and adjustment," European Economic Review, Elsevier, vol. 40(3-5), pages 959-967, April.
    12. Beatriz Tovar & Francisco Javier Ramos-Real & Edmar Fagundes de Almeida, 2009. "Productivity evolution and Scale effects in Brazilian Electricity Distribution Industry. Evidence from 1998-2005 period," Economic Reports 04-09, FEDEA.
    13. Carlos R. Azzoni, 2001. "Economic growth and regional income inequality in Brazil," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 35(1), pages 133-152.
    14. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
    15. Nijkamp, Peter & Perrels, Adriaan, 1988. "Impacts of electricity rates on industrial location," Energy Economics, Elsevier, vol. 10(2), pages 107-116, April.
    16. Hanoch, Giora, 1971. "CRESH Production Functions," Econometrica, Econometric Society, vol. 39(5), pages 695-712, September.
    17. William H. Miernyk, 1976. "Some Regional Impacts Of The Rising Costs Of Energy," Papers in Regional Science, Wiley Blackwell, vol. 37(1), pages 213-227, January.
    18. T. R. Lakshmanan, 1981. "Regional Growth and Energy Determinants: Implications for the Future," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 1-24.
    19. Philip D. Adams & Mark Horridge & Glyn Wittwer, 2003. "MMRF-GREEN: A Dynamic Multi-Regional Applied General Equilibrium Model of the Australian Economy, Based on the MMR and MONASH Models," Centre of Policy Studies/IMPACT Centre Working Papers g-140, Victoria University, Centre of Policy Studies/IMPACT Centre.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ferreira, Pedro Guilherme Costa & Oliveira, Fernando Luiz Cyrino & Souza, Reinaldo Castro, 2015. "The stochastic effects on the Brazilian Electrical Sector," Energy Economics, Elsevier, vol. 49(C), pages 328-335.
    2. Daglish, Toby & de Braganca, Gabriel & Owen, Sally & Romano, Teresa, 2015. "Electricity Market Operation: Transitioning from a Free Market to a Single Buyer structure: An econometric analysis of the Brazilian case using a Two-State Markov Switching Model," Working Paper Series 19257, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    3. Daglish, Toby & de Braganca, Gabriel & Owen, Sally & Romano, Teresa, 2015. "Electricity Market Operation: Transitioning from a Free Market to a Single Buyer structure: An econometric analysis of the Brazilian case using a Two-State Markov Switching Model," Working Paper Series 4181, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    4. Florent MCISAAC & Florent Mc ISAAC, 2017. "An Input-Output Analysis: What Would a Low-Carbon Economy for Brazil Mean?," Working Paper f2f77b78-bd3b-4408-b3e9-d, Agence française de développement.
    5. Haddad, Eduardo & Mena-Chalco, Jesús & Sidone, Otávio, 2015. "Scholarly Collaboration in Regional Science in Developing Countries: The Case of the Brazilian REAL Network," TD NEREUS 4-2015, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    6. Daglish, Toby & de Bragança, Gabriel Godofredo Fiuza & Owen, Sally & Romano, Teresa, 2021. "Pricing effects of the electricity market reform in Brazil," Energy Economics, Elsevier, vol. 97(C).
    7. repec:vuw:vuwscr:19257 is not listed on IDEAS
    8. Ben Abdallah, Khaled & Belloumi, Mounir & De Wolf, Daniel, 2015. "International comparisons of energy and environmental efficiency in the road transport sector," Energy, Elsevier, vol. 93(P2), pages 2087-2101.
    9. Proque, Andressa Lemes & dos Santos, Gervásio Ferreira & Betarelli Junior, Admir Antonio & Larson, William D., 2020. "Effects of land use and transportation policies on the spatial distribution of urban energy consumption in Brazil," Energy Economics, Elsevier, vol. 90(C).
    10. Diniz, Tiago & Ferreira-Filho, Joaquim Bento & Horridge, Mark, 2018. "Economic and regional impacts of investments in electricity generation in Brazil," Conference papers 332933, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Balta-Ozkan, Nazmiye & Watson, Tom & Mocca, Elisabetta, 2015. "Spatially uneven development and low carbon transitions: Insights from urban and regional planning," Energy Policy, Elsevier, vol. 85(C), pages 500-510.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Okubo, Toshihiro, 2009. "Trade liberalisation and agglomeration with firm heterogeneity: Forward and backward linkages," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 530-541, September.
    2. Lenaerts, Bert & Allroggen, Florian & Malina, Robert, 2021. "The economic impact of aviation: A review on the role of market access," Journal of Air Transport Management, Elsevier, vol. 91(C).
    3. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    4. Luca, Spinesi, 2005. "Vertical and Horizontal Innovation : Effects of Globalization and Migration on Inequality, Growth and Human Capital Accumulation," Discussion Papers (ECON - Département des Sciences Economiques) 2005028, Université catholique de Louvain, Département des Sciences Economiques.
    5. Frédéric Robert-Nicoud, 2006. "Agglomeration and Trade with Input–Output Linkages and Capital Mobility," Spatial Economic Analysis, Taylor & Francis Journals, vol. 1(1), pages 101-126.
    6. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.
    7. Mark Thissen & Narisra Limtanakool & Hans Hilbers, 2011. "Road pricing and agglomeration economies: a new methodology to estimate indirect effects applied to the Netherlands," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(3), pages 543-567, December.
    8. Toshiaki Takahashi & Hajime Takatsuka & Dao-Zhi Zeng, 2013. "Spatial inequality, globalization, and footloose capital," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(1), pages 213-238, May.
    9. Theodore Tsekeris & Klimis Vogiatzoglou, 2014. "Public infrastructure investments and regional specialization: empirical evidence from Greece," Regional Science Policy & Practice, Wiley Blackwell, vol. 6(3), pages 265-289, August.
    10. Karolina Ekholm & Katariina Hakkala, 2007. "Location of R&D and High-Tech Production by Vertically Integrated Multinationals," Economic Journal, Royal Economic Society, vol. 117(518), pages 512-543, March.
    11. Kim, Ho Yeon, 2012. "Shrinking population and the urban hierarchy," IDE Discussion Papers 360, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    12. Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2006. "Putting new economic geography to the test: Free-ness of trade and agglomeration in the EU regions," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 613-635, September.
    13. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 58, pages 2563-2608, Elsevier.
    14. José M. Gaspar, 2020. "Paul Krugman: contributions to Geography and Trade," Letters in Spatial and Resource Sciences, Springer, vol. 13(1), pages 99-115, April.
    15. Palan, Nicole & Schmiedeberg, Claudia, 2010. "Structural convergence of European countries," Structural Change and Economic Dynamics, Elsevier, vol. 21(2), pages 85-100, May.
    16. Kurt A. Hafner, 2015. "Tax Competition and Economic Integration," Review of Development Economics, Wiley Blackwell, vol. 19(1), pages 45-61, February.
    17. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    18. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    19. Stephen J. Redding, 2013. "Economic Geography: A Review of the Theoretical and Empirical Literature," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 16, pages 497-531, Palgrave Macmillan.
    20. Giuseppe Francesco Gori & Renato Paniccià, 2015. "A structural multisectoral model with new economic geography linkages for Tuscany," Papers in Regional Science, Wiley Blackwell, vol. 94, pages 175-196, November.

    More about this item

    JEL classification:

    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa10p157. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.