Analysing the Effects of Monetizing Energy Carriers Subsidy on Expenditures and Welfare Criteria of Iranian Households

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Einian, Majid | 2010

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 41160 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Fatemi, Farshad
Abstract:
In this thesis, with a review on policy simulation and economic reform analysis literature, we design a suitable method to analyze the effects of monetizing energy carriers subsidy on welfare criteria of Iranian households. The selected method is limited general equilibrium that needs demand estimates of goods, services and energy. In firs step,based on 13 years of data on “Iranian Households’ Expenditures and Income” surveys, data are provided as a pseudo-panel. Demand equations are estimated using “Seemingly Unrelated Regressions” for panel data, and elasticities are calculated. In the next step, we evaluated the equivalent variation and equivalent gain measures in each price scenarios. Our results indicate that direct cash payments will improve 85 to 90 percent of households’ welfare situation. 10 to 15 percent of affluent households will be faced with harsher times than before. Also we show that inequality in expenditures will decrease largely
Keywords:
Energy Subside ; Inequality ; Welfare Effects ; Iran Subsidy System ; Supply Shift ; Policy Simulation ; Reform Analysis ; Income Distribution