Structural Reforms and the Distributional Effects of Price Changes in Argentina

20 Pages Posted: 4 Oct 1999

See all articles by Fernando H. Navajas

Fernando H. Navajas

Fundacion de Investigaciones Economicas Latinoamericanas (FIEL); Universidad de Buenos Aires; Universidad Nacional de La Plata

Date Written: June 1999

Abstract

This paper focuses on the change in the distribution of consumption in Argentina in the last decade and evaluates the distributional impact of relative price changes to address one dimension of the distributional consequences of massive privatization and de-regulation. The approach used is based on the theory and measurement of marginal tax reform of Feldstein, Guesnerie, Amhad and Stern and others, as developed and implemented by Newbery (1995), using the concept of the "distributional characteristic of goods" as obtained from household expenditure surveys. In general the results contradict the view that relative price changes have had a negative welfare and distributional impact. In particular, the results speak well of the effects due to de-regulations such as the opening-up of the economy to international trade, but they are less positive insofar as privatization is concerned. Although relative price changes due to privatization have had a positive welfare effect, this has been partially reversed in the last years. The paper extends the analysis to other dimensions that are not normally captured by this approach such as 'coverage' (i.e. access by the poor or low-income agents to public infrastructure services) showing positive distributional impacts in this dimension.

JEL Classification: D30, D63, H23

Suggested Citation

Navajas, Fernando, Structural Reforms and the Distributional Effects of Price Changes in Argentina (June 1999). Available at SSRN: https://ssrn.com/abstract=178689 or http://dx.doi.org/10.2139/ssrn.178689

Fernando Navajas (Contact Author)

Fundacion de Investigaciones Economicas Latinoamericanas (FIEL) ( email )

A. Cordoba 637, 4 Piso
1054 Buenos Aires
Argentina
54 11 43141990 (Phone)
54 11 43148648 (Fax)

Universidad de Buenos Aires ( email )

Av. Córdoba 2122
Buenos Aires, C1120AAQ
Argentina

Universidad Nacional de La Plata

7 Nº 776
Buenos Aires, BA 1900
Argentina

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