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Gasoline subsidy and consumer surplus in the Islamic Republic of Iran

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  • Asghar Shahmoradi
  • Afshin Honarvar

Abstract

Gasoline subsidy in Islamic Republic of Iran is a controversial issue. While a group of politicians believe that its merits outweigh its costs, some economists believe that its harms exceed the benefits. A new approach is taken to study the changes in social welfare because of gasoline subsidies for the period 1987-2005. The findings indicate that the consumers' surplus has declined over time for a representative consumer. A large population growth, inflation and non-substitutability of gasoline with other goods might have caused this phenomenon. Copyright 2008 The Authors. Journal compilation 2008 Organization of the Petroleum Exporting Countries.

Suggested Citation

  • Asghar Shahmoradi & Afshin Honarvar, 2008. "Gasoline subsidy and consumer surplus in the Islamic Republic of Iran," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 32(3), pages 232-245, September.
  • Handle: RePEc:bla:opecrv:v:32:y:2008:i:3:p:232-245
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    References listed on IDEAS

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    10. Djavad Salehi-Isfahani, 1996. "Government Subsidies and Demand for Petroleum Products in Iran," Working Papers 9636, Economic Research Forum, revised Nov 1996.
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    Cited by:

    1. Haqiqi, Iman & Yasharel, Sepideh, 2018. "Removing Fossil Fuel Subsidies to Help the Poor," MPRA Paper 95907, University Library of Munich, Germany.
    2. Manzoor, Davood & Haqiqi, Iman & Aghababaei, Mohammad, 2012. "Decomposing Electricity Demand Elasticity in Iran: Computable General Equilibrium Approach," MPRA Paper 95817, University Library of Munich, Germany.
    3. TERI Team, 2013. "Regional Cooperation for Energy Access and Energy Security in South and South-West Asia," Development Papers 1302, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office.

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