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The impact of electricity price changes on industrial prices and the general price level in Korea

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  • Lim, Seul-Ye
  • Yoo, Seung-Hoon

Abstract

Electricity has played an important role in the economic development of Korea and, thus, has become a critical factor in sustaining the well-being of the Korean people. This study attempts to investigate the impact of electricity price changes on industrial prices and the general price level using input–output (I–O) analysis. To this end, we apply the I–O price model to the 2011 I–O table recently produced by the Bank of Korea, paying particular attention to the electricity sector by considering it as exogenous and then investigating its impacts. The impacts of the electricity price changes on each industrial sector's prices and the general price level are quantitatively derived. For example, the overall impact of a 10% increase in electricity price on the Korean national economy is estimated to be 0.4367%. We also report the results from the model with the electricity sector endogenous and the model with endogenous electricity and labor sectors. This information can be usefully utilized in decision-making regarding price management for electricity.

Suggested Citation

  • Lim, Seul-Ye & Yoo, Seung-Hoon, 2013. "The impact of electricity price changes on industrial prices and the general price level in Korea," Energy Policy, Elsevier, vol. 61(C), pages 1551-1555.
    • Handle: RePEc:eee:enepol:v:61:y:2013:i:c:p:1551-1555
    DOI: 10.1016/j.enpol.2013.06.129
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    References listed on IDEAS

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    1. Wassily Leontief, 1946. "Wages, Profit and Prices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 61(1), pages 26-39.
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    4. World Bank, 2013. "World Development Indicators 2013," World Bank Publications - Books, The World Bank Group, number 13191.
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    Citations

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    Cited by:

    1. Hao Xiao & Shuquan Li & Julien Chevallier & Bangzhu Zhu, 2017. "Electricity-Savings Pressure and Electricity-Savings Potential among China?s Inter-Provincial Manufacturing Sectors," Working Papers 2017-006, Department of Research, Ipag Business School.
    2. Meng, F.Y. & Zhou, D.Q. & Zhou, P. & Bai, Y., 2014. "Sectoral comparison of electricity-saving potentials in China: An analysis based on provincial input–output tables," Energy, Elsevier, vol. 72(C), pages 772-782.
    3. Kim, Ju-Hee & Yoo, Seung-Hoon, 2021. "Comparison of the economic effects of nuclear power and renewable energy deployment in South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    4. Yang Xu & Jiahua Hu & Yizheng Wang & Weiwei Zhang & Wei Wu, 2022. "Understanding the Economic Responses to China’s Electricity Price-Cutting Policy: Evidence from Zhejiang Province," Sustainability, MDPI, vol. 14(18), pages 1-24, September.
    5. Ai, Hongshan & Xiong, Shiya & Li, Ke & Jia, Pinrong, 2020. "Electricity price and industrial green productivity: Does the “low-electricity price trap” exist?," Energy, Elsevier, vol. 207(C).
    6. Wang, Di & Zhang, Zhiyuan & Yang, Xiaodi & Zhang, Yanfang & Li, Yuman & Zhao, Yueying, 2021. "Multi-scenario simulation on the impact of China's electricity bidding policy based on complex networks model," Energy Policy, Elsevier, vol. 158(C).

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