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A New Tool for Distributional Incidence Analysis: An Application to Fuel Subsidy Reform
Author:
Ms. Stefania Fabrizio
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,
Mr. Alexei Goumilevski
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, and
Mr. Kangni R Kpodar
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Series:
Technical Notes and Manuals
Volume/Issue:
Volume 2016: Issue 007
Language:
English
Publication Date:
27 Oct 2016
DOI:
https://doi.org/10.5089/9781475546743.005
ISBN:
9781475546743
ISSN:
2075-8669
Pages:
16
Keywords:
TNM; price; firm; subsidy reform; price change; price behavior; price-shifting model; oil price volatility; Energy subsidies; Fuel prices; Inflation; Consumption; Income; Global
Legal-disclaimer:
This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this paper are those of the authors and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Increased focus on income inequality and distributional issues has made incidence analysis a crucial input into policy decisions. This note presents the theoretical framework used to conduct incidence analysis of fuel price subsidy reform and presents a user-friendly tool for its application. This new tool requires limited inputs and has the advantage of using the commonly available software program Excel. The note presents an illustration based on the case of Brazil, using the 2005 household survey and input-output table. The results reinforce the typical finding that fuel subsidies benefit well-off households and that their removal would be progressive.
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Cover Technical Notes and Manuals
Technical Notes and Manuals
ISSN:
2075-8669
Publisher:
International Monetary Fund
Volume 2016: Issue 007