Distributional Effects of Oil Price Changes on Household Expenditures: Evidence from Mali

33 Pages Posted: 17 May 2006

See all articles by Kangni Kpodar

Kangni Kpodar

International Monetary Fund (IMF)

Date Written: March 2006

Abstract

Using an input-output approach, this paper assesses the distributional effects of a rise in various petroleum product prices in Mali. The results show that, although 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. This suggests that a petroleum price subsidy is an ineffective mechanism for protecting the income of poor households compared with a targeted subsidy.

Keywords: Oil, subsidies, input-output analysis, household welfare

JEL Classification: H2, D57, R2

Suggested Citation

Kpodar, Kangni, Distributional Effects of Oil Price Changes on Household Expenditures: Evidence from Mali (March 2006). IMF Working Paper No. 06/91, Available at SSRN: https://ssrn.com/abstract=901882

Kangni Kpodar (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
481
Abstract Views
3,360
rank
64,049
PlumX Metrics