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Determination of Parity Price for Gas and Electricity in Terms of Estimation of Household Incomes and Energy Costs

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  • Nadiia Pysar

    (Vasyl Stefanyk Precarpathian National University, Ivano-Frankivsk, Ukraine,)

  • Victoria Dergacheva

    (Igor Sikorsky Kyiv Polytechnic Institute, Kyiv, Ukraine)

Abstract

The paper is concerned with comparing household incomes in Ukraine and European countries, estimating households' gas and electricity costs, as well as determining parity prices for these goods in Ukraine for 2016. The calculation of parity prices for electricity and gas was carried out by the share of household's electricity and gas costs in the respective country to its income level and by the absolute need of the corresponding household for electricity and gas in the respective country. The determination of the parity price for gas and electricity relative to household incomes and energy costs is an attempt to come up with a decision on the need to increase or decrease prices for these goods in Ukraine compared to other countries and to assess their relationship to household incomes in order to avoid fuel poverty in Ukraine. An investigation of this problem enables to focus on comparing prices and electricity and gas costs with household incomes using a sales comparison approach and determine the need to increase or decrease prices in Ukraine to the level of European prices for similar goods. This approach to determining the parity price for energy resources can be used for any other country taken as a basis for analysis and calculation.

Suggested Citation

  • Nadiia Pysar & Victoria Dergacheva, 2018. "Determination of Parity Price for Gas and Electricity in Terms of Estimation of Household Incomes and Energy Costs," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 342-346.
    • Handle: RePEc:eco:journ2:2018-05-43
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    References listed on IDEAS

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    Cited by:

    1. Valeriy Prasolov & Valery Bezpalov & Svetlana Doguchaeva & Rodion Rogulin, 2020. "Energy Price Formation and Energy Consumption by Households as a Factor of Ensuring Energy Safety," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 82-93.

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    More about this item

    Keywords

    energy efficiency; pricing; parity; law of one price; market conditions; liberalization; common energy space.;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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