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An Assessment of the Impact of Reducing Implicit and Explicit Energy Subsidies in Iran; Using a Computable General Equilibrium Model Based on a Modified Micro Consistent Matrix

Author

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  • Davood, Manzoor
  • Asghar, Shahmoradi
  • Iman, Haqiqi

Abstract

This paper identifies two types of implicit and explicit energy subsidies in Iran. Using a computable general equilibrium model, we analyze the impacts of reducing implicit and explicit energy subsidies. The model is based on a Modified Micro Consistent Matrix of MOE (the Ministry of Energy) which includes implicit subsidies. The model consists of 36 commodity groups and 18 economic activities. Our findings suggest that overall economic activity and consumer welfare will be reduced following the reduction of energy subsidies. Energy exports would increase and nonenergy exports decline. Economic activity will decline across all sectors except for upstream energy activities. Domestic energy demand by households and producers would decline as well.

Suggested Citation

  • Davood, Manzoor & Asghar, Shahmoradi & Iman, Haqiqi, 2010. "An Assessment of the Impact of Reducing Implicit and Explicit Energy Subsidies in Iran; Using a Computable General Equilibrium Model Based on a Modified Micro Consistent Matrix," MPRA Paper 95808, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95808
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    References listed on IDEAS

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    1. Yusuf, Arief Anshory & Resosudarmo, Budy P., 2007. "Searching for Equitable Energy Price Reform for Indonesia," MPRA Paper 1946, University Library of Munich, Germany.
    2. Kuster, Robert & Ellersdorfer, Ingo & Fahl, Ulrich, 2007. "A CGE-Analysis of Energy Policies Considering Labor Market Imperfections and Technology Specifications," Climate Change Modelling and Policy Working Papers 12035, Fondazione Eni Enrico Mattei (FEEM).
    3. Davood Manzoor & Asghar Shahmoradi & Iman Haqiqi, 2012. "An analysis of energy price reform: a CGE approach," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 36(1), pages 35-54, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Haqiqi, Iman & Bahalou, Marziyeh & Shamsaee, Arezoo, 2017. "An Economic General Equilibrium Model for Evaluation of Production Support Policies in Developing Countries," MPRA Paper 95865, University Library of Munich, Germany.
    2. Haqiqi, Iman & Yasharel, Sepideh, 2018. "Removing Fossil Fuel Subsidies to Help the Poor," MPRA Paper 95907, University Library of Munich, Germany.
    3. Aghababaei, Mohammad Ebrahim, 2019. "General Equilibrium Resource Elasticity in an Open Resource-Abundant Economy," MPRA Paper 97851, University Library of Munich, Germany.
    4. Raei, Hasan & Maleki, Abbas & Farajzadeh, Zakariya, 2024. "Analysis of energy policy reform in Iran: Energy and emission intensity changes," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1535-1557.
    5. Mortazavi Kakhaki, Morteza & Haqiqi, Iman & Mahdavi Adeli, Mohammad, 2013. "Regional Equality of Opportunities and Income: A General Equilibrium Modeling for Iran," MPRA Paper 95822, University Library of Munich, Germany.
    6. Bahalou, Marziyeh & Haqiqi, Iman, 2016. "A General Equilibrium Model with Labor-Leisure and Domestic-Abroad Choice for Assessment of Labor Migration in a Small Open Economy," MPRA Paper 95863, University Library of Munich, Germany.
    7. Haqiqi, Iman & Bahalou, Marziyeh & Hamidi, Razieh, 2014. "Measurement and Evaluation of Equality of Opportunity: A Numerical Look at Education, Health, and Income Inequality," MPRA Paper 95866, University Library of Munich, Germany.
    8. Haqiqi, Iman & Mirian, Narges, 2015. "A Financial General Equilibrium Model for Assessment of Financial Sector Policies in Developing Countries," MPRA Paper 95841, University Library of Munich, Germany.

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    More about this item

    Keywords

    implicit subsidy; energy policy; computable general equilibrium; energy demand; sector specific factor;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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