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Revisiting distributional effects of energy subsidies in Argentina

Author

Listed:
  • Octavio Bertín

    (National University of La Plata (UNLP))

  • Thomas García

    (National University of La Plata (UNLP))

  • Francisco Pizzi

    (National University of La Plata (UNLP)
    UC Davis (California))

  • Alberto Porto

    (National University of La Plata (UNLP)
    National Academy of Economic Science of Argentina (ANCE))

  • Julian Puig

    (National University of La Plata (UNLP))

  • Jorge Puig

    (National University of La Plata (UNLP))

Abstract

We review the distributional incidence of residential energy subsidies using the attractive case of Argentina, a developing country that has massively subsidized electricity in recent decades. Using multiple data sources, we explore two key dimensions often overlooked in prior research. First, we focus on geographic variation, as most previous studies primarily address the Buenos Aires Metropolitan Area (AMBA), the most populous region in the country. However, Argentina’s territorial heterogeneity demands for further analysis, particularly given that the stage of electricity distribution introduces significant differences between jurisdictions. Second, we emphasize the financing of subsidies, as most previous studies generally omit the net incidence. Our results indicate that regional disparities in electricity distribution costs and the pricing strategies of distribution companies are critical factors driving the distributional incidence. Additionally, ignoring the financing of subsidies can lead to a misperception on their redistributive effect.

Suggested Citation

  • Octavio Bertín & Thomas García & Francisco Pizzi & Alberto Porto & Julian Puig & Jorge Puig, 2025. "Revisiting distributional effects of energy subsidies in Argentina," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 72(1), pages 1-39, June.
    • Handle: RePEc:spr:inrvec:v:72:y:2025:i:1:d:10.1007_s12232-025-00484-z
    DOI: 10.1007/s12232-025-00484-z
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    More about this item

    Keywords

    Distributive incidence; Subsidies; Electricity; Argentina;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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