IDEAS home Printed from https://ideas.repec.org/p/dls/wpaper/0331.html
   My bibliography  Save this paper

Revisiting Distributional Effects of Energy Subsidies in Argentina

Author

Listed:
  • Octavio Bertín

    (CEDLAS-IIE-FCE-UNLP & CEFIP-IIE-FCE-UNLP)

  • Thomas García

    (CEFIP-IIE-FCE-UNLP)

  • Francisco Pizzi

    (CEFIP-IIE-FCE-UNLP & UC Davis (California))

  • Alberto Porto

    (CEFIP-IIE-FCE-UNLP & ANCE)

  • Julian Puig

    (CEFIP-IIE-FCE-UNLP)

  • Jorge Puig

    (CEDLAS-IIE-FCE-UNLP & CEFIP-IIE-FCE-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 central dimensions, usually omitted in previous research. On the one hand, we focus on geography given that previous studies mostly focus on the Buenos Aires Metropolitan Area (i.e., AMBA), the most populated region in the country. However, Argentina’s territorial heterogeneity demands further analysis, given that the stage of electricity distribution introduces heterogeneities between jurisdictions. On the other hand, we focus on the subsidies’ financing given that previous studies do not focus on the net incidence. Our results indicate that: regional disparities in the costs of electricity distribution and the prices set by the distribution companies are key drivers of the distributional incidence. Also omitting subsidies’ financing may lead to overestimating the belief about their redistributive effect.

Suggested Citation

  • Octavio Bertín & Thomas García & Francisco Pizzi & Alberto Porto & Julian Puig & Jorge Puig, 2024. "Revisiting Distributional Effects of Energy Subsidies in Argentina," CEDLAS, Working Papers 0331, CEDLAS, Universidad Nacional de La Plata.
    • Handle: RePEc:dls:wpaper:0331
    as

    Download full text from publisher

    File URL: http://www.cedlas.econo.unlp.edu.ar/wp/wp-content/uploads/doc_cedlas331-9.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Krauss, Alexander, 2016. "How natural gas tariff increases can influence poverty: Results, measurement constraints and bias," Energy Economics, Elsevier, vol. 60(C), pages 244-254.
    2. Helm, Dieter, 1986. "The Assessment: The Economic Borders of the State," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 2(2), pages 1-1, Summer.
    3. Ersado, Lire, 2012. "Poverty and distributional impact of gas price hike in Armenia," Policy Research Working Paper Series 6150, The World Bank.
    4. Dartanto, Teguh, 2013. "Reducing fuel subsidies and the implication on fiscal balance and poverty in Indonesia: A simulation analysis," Energy Policy, Elsevier, vol. 58(C), pages 117-134.
    5. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931, Decembrie.
    6. Walter Cont, 2007. "Estructuras tarifarias en el servicio de electricidad para usuarios residenciales. El caso de las provincias argentinas," Working Papers 95, FIEL.
    7. Dieter Helm, 2015. "Rethinking the economic borders of the state—ownership, assets, and competition," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 31(2), pages 168-185.
    8. Siddig, Khalid & Aguiar, Angel & Grethe, Harald & Minor, Peter & Walmsley, Terrie, 2014. "Impacts of removing fuel import subsidies in Nigeria on poverty," Energy Policy, Elsevier, vol. 69(C), pages 165-178.
    9. Dasgupta, Partha, 1986. "Positive Freedom, Markets and the Welfare State," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 2(2), pages 25-36, Summer.
    10. Giuliano, Fernando & Lugo, Maria Ana & Masut, Ariel & Puig, Jorge, 2020. "Distributional effects of reducing energy subsidies: Evidence from recent policy reform in Argentina," Energy Economics, Elsevier, vol. 92(C).
    11. Hammerle, Mara & Best, Rohan & Crosby, Paul, 2021. "Public acceptance of carbon taxes in Australia," Energy Economics, Elsevier, vol. 101(C).
    12. van de Walle, Dominique, 1998. "Assessing the welfare impacts of public spending," World Development, Elsevier, vol. 26(3), pages 365-379, March.
    13. Moshiri, Saeed, 2015. "The effects of the energy price reform on households consumption in Iran," Energy Policy, Elsevier, vol. 79(C), pages 177-188.
    14. Alberto Porto & Jorge Puig, 2023. "Fiscal Federalism: The Interaction between Own Revenues and Intergovernmental Transfers in Local Governments—The Case of Municipalities in Buenos Aires," Publius: The Journal of Federalism, CSF Associates Inc., vol. 53(4), pages 642-678.
    15. R. A. Musgrave, 1964. "Estimating The Distribution Of The Tax Burden," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 10(1), pages 186-219, March.
    Full references (including those not matched with items on IDEAS)

    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. Giuliano, Fernando & Lugo, Maria Ana & Masut, Ariel & Puig, Jorge, 2020. "Distributional effects of reducing energy subsidies: Evidence from recent policy reform in Argentina," Energy Economics, Elsevier, vol. 92(C).
    2. Cont, Walter & Porto, Alberto, 2014. "Personal and regional redistribution through public finance in a federal setting," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(4), pages 563-578.
    3. repec:diw:diwwpp:dp2010 is not listed on IDEAS
    4. Aiman Albatayneh & Adel Juaidi & Francisco Manzano-Agugliaro, 2023. "The Negative Impact of Electrical Energy Subsidies on the Energy Consumption—Case Study from Jordan," Energies, MDPI, vol. 16(2), pages 1-17, January.
    5. Dennis, Allen, 2016. "Household welfare implications of fossil fuel subsidy reforms in developing countries," Energy Policy, Elsevier, vol. 96(C), pages 597-606.
    6. Acharya, Rajesh H. & Sadath, Anver C., 2017. "Implications of energy subsidy reform in India," Energy Policy, Elsevier, vol. 102(C), pages 453-462.
    7. Fahman Fathurrahman & Bora Kat & Uğur Soytaṣ, 2017. "Simulating Indonesian fuel subsidy reform: a social accounting matrix analysis," Annals of Operations Research, Springer, vol. 255(1), pages 591-615, August.
    8. Julian Puig & Leonardo Gasparini & Jorge Puig, 2025. "Energy Poverty on the Flip Side of Energy Subsidies," CEDLAS, Working Papers 0348, CEDLAS, Universidad Nacional de La Plata.
    9. Li, Lanlan & Luo, Xuan & Zhou, Kaile & Xu, Tingting, 2018. "Evaluation of increasing block pricing for households' natural gas: A case study of Beijing, China," Energy, Elsevier, vol. 157(C), pages 162-172.
    10. Saeed Solaymani, 2016. "Impacts of energy subsidy reform on poverty and income inequality in Malaysia," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(6), pages 2707-2723, November.
    11. Peltovuori, Ville, 2017. "Fossil fuel subsidies in the Pacific island context: Analysis of the case of Kiribati," Energy Policy, Elsevier, vol. 111(C), pages 102-110.
    12. Bah, Muhammad Maladoh & Saari, M. Yusof, 2020. "Quantifying the impacts of energy price reform on living expenses in Saudi Arabia," Energy Policy, Elsevier, vol. 139(C).
    13. Henseler, Martin & Maisonnave, Helene, 2018. "Low world oil prices: A chance to reform fuel subsidies and promote public transport? A case study for South Africa," Transportation Research Part A: Policy and Practice, Elsevier, vol. 108(C), pages 45-62.
    14. Shittu, Ibrahim & Abdul Latiff, Abdul Rais & Baharudin, Siti ‘Aisyah, 2024. "Assessing the compensation and reinvestment plans for fuel subsidy rationalization in Nigeria: A dynamic computable general equilibrium approach," Energy, Elsevier, vol. 293(C).
    15. Anton Orlov, 2017. "Distributional effects of higher natural gas prices in Russia," EcoMod2017 10186, EcoMod.
    16. Jiang, Zhujun & Ouyang, Xiaoling & Huang, Guangxiao, 2015. "The distributional impacts of removing energy subsidies in China," China Economic Review, Elsevier, vol. 33(C), pages 111-122.
    17. Cecile Couharde & Sara Mouhoud, 2020. "Fossil Fuel Subsidies, Income Inequality, And Poverty: Evidence From Developing Countries," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 981-1006, December.
    18. Scobie, Michelle, 2017. "Fossil fuel reform in developing states: The case of Trinidad and Tobago, a petroleum producing small Island developing State," Energy Policy, Elsevier, vol. 104(C), pages 265-273.
    19. Moshiri, Saeed & Lechtenböhmer, Stefan (ed.), 2015. "Sustainable energy strategy for Iran," Wuppertal Spezial, Wuppertal Institute for Climate, Environment and Energy, volume 51, number 51.
    20. Leßmann Ortrud, 2009. "Die Rolle der Wahlfreiheit in der Armutsbekämpfung / The Role of Freedom of Choice in Poverty Alleviation," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 60(1), pages 415-434, January.
    21. Shittu, Ibrahim & Abdul Latiff, Abdul Rais & Baharudin, Siti ‘Aisyah & Mohd, Saidatulakmal, 2024. "Economy-wide impact of targeting and repurposing fossil fuel subsidies in Malaysia," Energy Policy, Elsevier, vol. 195(C).

    More about this item

    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

    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:dls:wpaper:0331. 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: Ana Pacheco (email available below). General contact details of provider: https://edirc.repec.org/data/funlpar.html .

    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.