Food and energy subsidy reforms in Iran: A general equilibrium analysis

Gharibnavaz, Mohammad Reza; Waschik, Robert

doi:10.1016/j.jpolmod.2015.07.002

Cited by 32 publications

(13 citation statements)

References 7 publications

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“…Several studies focus on the MENA region, using CGE models to investigate the impact of subsidy reform. Gharibnavaz and Waschik (2015), Jensen and Tarr (2003), Karami et al (2012), and Manzoor et al (2012) look at the effects of food and energy subsidy reform in Iran. These studies conclude that as a result of cuts in subsidies, targeted compensation can lead to large welfare increases, especially for lower income households.…”

Section: Using Cge Models To Analyse the Impact Of Energy Price Reformmentioning

confidence: 99%

The Economy-Wide Impact of Subsidy Reform: A CGE Analysis

Roos

Adams

2020

World Trade Review

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Oil prices fell from around $US110 per barrel in 2014 to less than $US50per barrel at the start of 2017. This put enormous pressure on government budgets within the Gulf Cooperation Council (GCC) region. The focus of GCC economic policies quickly shifted to fiscal reform, including the removal of domestic subsidies on energy products. In this paper, we use a dynamic Computable General Equilibrium (CGE) model to investigate the economic impact of the gradual removal of subsidies on refined petroleum and electricity, with specific reference to the Kingdom of Saudi Arabia (KSA).Our study shows that removing subsidies eliminates a large distortion in the economy. This improves the efficiency of resource use, so that even though employment and capital in most years fall relative to baseline levels, real GDP rises. In addition, we show that fully-funded compensation payments offset the increases in energy prices, leaving economic welfare of the Saudi-national population little affected. Removing the energy subsidies leads to an improvement in the net volume of trade, while leading to a mixed outcome for industries.

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Section: Using Cge Models To Analyse the Impact Of Energy Price Reformmentioning

confidence: 99%

The Economy-Wide Impact of Subsidy Reform: A CGE Analysis

Roos

Adams

2020

World Trade Review

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“…For instance, Moiseyev et al [3] projected impact of subsidies and carbon pricing on the use of wood biomass for energy in the UK. Another study by Sun et al [4] investigates subsidies on household biogas use in China, while a study by Gharibnavaz and Waschik [5] investigate the food and energy subsidy reform in Iran. Nauleau et al [6] argue that subsidy should be differentiated to achieve the social optimum.…”

Section: Development Of Electric Power Plant Biogas From Palm Industrmentioning

confidence: 99%

Formulating Interest Subsidy Program to Support the Development of Electricity Generation from Palm Oil Mill Effluent (POME) Biomass: An Indonesian Case Study

Syaifudin¹,

Nurkholis²,

Handika³

et al. 2018

MATEC Web Conf.

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Abstract. This paper analyses financial feasibility and cost-benefit and formulates the relevant subsidy program that is currently implemented by the government. We find that providing interest subsidy is financially feasible only if it serves to substitute the consumption of diesel. The benefits are higher than the costs among three types (45 t, 60 t and 75 t) of the palm waste generator capacity. The paper also reveals that Credit Program is relevant with the objective, to provide interest subsidy to farmers, but certain adaptations are required.

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“…Commodities with an x superscript (oil, petroleum products, metals) are those where sanctions are applied on Iranian exports to “SAN” countries, while commodities with an m superscript (petroleum products, metals, motor vehicles) are those where sanctions are applied on Iranian imports from “SAN” countries. Economic activity in Iran has long been dominated by the oil sector, and before their recent reform in 2010, large state fuel subsidies resulted in a petrol sector which is considerably larger (as a share of the value of output) than that in other regions (see Gharibnavaz & Waschik, ). As a result, the share of output accounted for by the manufacturing and service sectors is notably smaller in Iran.…”

Section: Data and Cge Modelmentioning

confidence: 99%

“…To disaggregate private expenditure, we use the Income and Expenditure Survey published by the Statistical Centre of Iran () to calculate expenditure shares θ i,h,n at different income deciles n

italicϵ

(1, 2, …, 10) of households h

italicϵ

( urban, rural ) which are consistent with the 18 aggregated commodities i . These shares are reported in tables A1 and A2 of Gharibnavaz and Waschik (). We also use the SCI Income and Expenditure Survey to disaggregate income by household.…”

Section: Data and Cge Modelmentioning

confidence: 99%

“…As noted earlier, all natural resource rents accrue to the government in Iran, as does income earned by capital employed in energy sectors. Remaining income in the GTAP8 data set is allocated to disaggregated urban and rural households using shares reported in table A3 of Gharibnavaz and Waschik (), where income categories in the SCI Income and Expenditure Survey are matched to GTAP8 factors. After disaggregating household income by source and household expenditure by commodity, the income equals expenditure constraint for each household will no longer be satisfied, because the accounting disaggregation does not take account of savings.…”

Section: Data and Cge Modelmentioning

confidence: 99%

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A computable general equilibrium model of international sanctions in Iran

Gharibnavaz

Waschik

2017

World Economy

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We detail recent international sanctions against the Iranian economy and its government imposed by a subset of developed countries. The effects of these sanctions on the Iranian economy in general and upon upper and lower‐income rural and urban Iranian households, as well as the Iranian government, are modelled using a computable general equilibrium (CGE) model. We supplement the Global Trade Analysis Project 8 data set using income and expenditure shares from the Urban and Rural Household Income and Expenditure Survey from the Statistical Centre of Iran (SCI). The model is calibrated to simulate the effects of international sanctions as closely as possible. We use endogenous trade taxes to simulate the effects of sanctions on Iranian oil and petrochemical exports and Iranian imports of petroleum products, metal products and motor vehicles. Our study finds that international sanctions reduced aggregate Iranian welfare by 14%–15%. Rural households in Iran suffered welfare losses which were almost double those experienced by urban households, and the poorest urban and rural households experienced the largest welfare losses, in the order of 5%–10%. But the government of Iran sees a decrease in real revenue of 40%–50%, due to the large negative effect of sanctions on the Iranian oil sector.

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Food and energy subsidy reforms in Iran: A general equilibrium analysis

Cited by 32 publications

References 7 publications

The Economy-Wide Impact of Subsidy Reform: A CGE Analysis

The Economy-Wide Impact of Subsidy Reform: A CGE Analysis

Formulating Interest Subsidy Program to Support the Development of Electricity Generation from Palm Oil Mill Effluent (POME) Biomass: An Indonesian Case Study

A computable general equilibrium model of international sanctions in Iran

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