Distributional Effects of Oil Price Changeson Household Expenditures: Evidence From Mali
IMF Working Papers, March 1, 2006
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Bibliographic details
- Authors: Kangni R Kpodar
- Published: March 1, 2006
- Series: IMF Working Papers
Summary and Key Findings
- Using an input-output approach, the paper assesses distributional effects of a rise in various petroleum product prices in Mali.
- Rising gasoline and diesel prices affect mainly nonpoor households.
- Rising kerosene prices are most harmful to the poor.
- Overall, the impact of fuel prices on household budgets displays a U-shaped relationship with expenditure per capita.
- Regardless of the oil product considered, high-income households would benefit disproportionately from oil price subsidies.
- Conclusion: A petroleum price subsidy is an ineffective mechanism for protecting the income of poor households compared with a targeted subsidy.
Methodology
- Analytical approach: input-output analysis (as stated in the summary).
Distributional Effects by Oil Product
- Gasoline: primarily affects nonpoor households.
- Diesel: primarily affects nonpoor households.
- Kerosene: most harmful to poor households.
- General pattern: U-shaped relationship between fuel price impact and expenditure per capita.
Policy Implications and Recommendations
- Petroleum price subsidies disproportionately benefit high-income households.
- Targeted subsidies are recommended over general petroleum price subsidies to protect poor households’ incomes.
Publication and Metadata
- Author: Kangni R Kpodar
- Date: March 1, 2006
- Series: Working Paper No. 2006/091
- Volume: 2006
- Issue: 091
- Pages: 33
- Stock No: WPIEA2006091
- ISBN: 9781451863512
- ISSN: 1018-5941
- DOI: ---
- Subjects: Commodities, Energy subsidies, Expenditure, Inflation, Oil, Oil prices, Prices
- Keywords: Africa, CIF import price, electricity price, Energy subsidies, expenditure effect, factor price, food price hike, household welfare, Inflation, input-output analysis, Oil, oil price hike, Oil prices, oil product, output price, price, producer price change, refined oil price, subsidies, supplier price, World oil price, WP
Source: Kangni R Kpodar, "Distributional Effects of Oil Price Changeson Household Expenditures: Evidence From Mali", IMF Working Papers 2006, 091 (March 1, 2006).