IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/3960.html
   My bibliography  Save this paper

The impact of energy price changes in Moldova

Author

Listed:
  • Baclajanschi, Iaroslav
  • Bouton, Lawrence
  • Mori, Hideki
  • Ostojic, Dejan
  • Pushak, Taras
  • Tiongson, Erwin R.

Abstract

In January 2006 the price of natural gas supplied to Moldova increased from $80 to $110 per thousand cubic meters (mcm). Prices may increase further in the near future, putting additional pressure on the economy and leading to adverse effects on the poorest households. This study examines the potential impact of higher energy prices on the economy of Moldova by simulating the likely macroeconomic consequences of recent and future price increases. Moreover, it estimates the direct impact on individual households using data drawn from the 2004 Household Budget Survey. It assesses the distributional implications of the price shock, noting how the social impact may vary depending on the intensity of energy use, geographic location, and the relative share of energy in household expenditure. The results suggest that energy price changes could dampen economic growth while putting additional strains on the current account deficit. The impact on the poorest households could be significant and protecting them may require resources in the amount of 0.7 to 1.7 percent of GDP. This study identifies possible policy responses to dampen the shock of the energy price increase and to promote the longer-term objective of reducing energy vulnerability.

Suggested Citation

  • Baclajanschi, Iaroslav & Bouton, Lawrence & Mori, Hideki & Ostojic, Dejan & Pushak, Taras & Tiongson, Erwin R., 2006. "The impact of energy price changes in Moldova," Policy Research Working Paper Series 3960, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3960
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/07/11/000016406_20060711113759/Rendered/PDF/wps3960.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nils Junge & Taras Pushak & Julian Lampietti & Nora Dudwick & Katelijn Van den Berg, 2004. "Sharing Power : Lessons Learned from the Reform and Privatization of Moldova's Electricity Sector," World Bank Publications - Reports 14489, The World Bank Group.
    2. World Bank, 2004. "Recession, Recovery and Poverty in Moldova," World Bank Publications - Reports 14424, The World Bank Group.
    3. Matthew D. Shapiro & David W. Wilcox, 1997. "Alternative strategies for aggregating prices in the CPI," Review, Federal Reserve Bank of St. Louis, issue May, pages 113-125.
    4. Julian Lampietti, 2004. "Power's Promise : Electricity Reforms in Eastern Europe and Central Asia," World Bank Publications - Books, The World Bank Group, number 14936.
    5. Freund, Caroline & Wallich, Christine, 1997. "Public-Sector Price Reforms in Transition Economies: Who Gains? Who Loses? The Case of Household Energy Prices in Poland," Economic Development and Cultural Change, University of Chicago Press, vol. 46(1), pages 35-59, October.
    6. Pollak, Robert A., 1989. "The Theory of the Cost-of-Living Index," OUP Catalogue, Oxford University Press, number 9780195058703.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Giuliano, Fernando & Lugo, Maria Ana & Masut, Ariel & Puig, Jorge, 2020. "Distributional effects of reducing energy subsidies: Evidence from recent policy reform in Argentina," Energy Economics, Elsevier, vol. 92(C).
    2. Ibrahim Halil Eksi & Mehmet Senturk & H. Semih Yildirim, 2012. "Sensitivity of Stock Market Indices to Oil Prices: Evidence from Manufacturing Sub-Sectors in Turkey," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 59(4), pages 463-474, September.
    3. Ersado, Lire, 2012. "Poverty and distributional impact of gas price hike in Armenia," Policy Research Working Paper Series 6150, The World Bank.
    4. Krauss, Alexander, 2016. "How natural gas tariff increases can influence poverty: Results, measurement constraints and bias," Energy Economics, Elsevier, vol. 60(C), pages 244-254.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ersado, Lire, 2012. "Poverty and distributional impact of gas price hike in Armenia," Policy Research Working Paper Series 6150, The World Bank.
    2. David E. Lebow & Jeremy B. Rudd, 2006. "Inflation measurement," Finance and Economics Discussion Series 2006-43, Board of Governors of the Federal Reserve System (U.S.).
    3. Marshall Reinsdorf & Jack E. Triplett, 2009. "A Review of Reviews: Ninety Years of Professional Thinking About the Consumer Price Index," NBER Chapters, in: Price Index Concepts and Measurement, pages 17-83, National Bureau of Economic Research, Inc.
    4. Jerry Hausman, 2002. "Sources of Bias and Solutions to Bias in the CPI," NBER Working Papers 9298, National Bureau of Economic Research, Inc.
    5. Erwin Diewert & John Greenlees & Charles R. Hulten, 2009. "Introduction: What Are the Issues?," NBER Chapters, in: Price Index Concepts and Measurement, pages 1-16, National Bureau of Economic Research, Inc.
    6. Lars Nesheim, 2006. "Hedonic price functions," CeMMAP working papers CWP18/06, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    7. Diewert, Erwin, 2009. "Cost of Living Indexes and Exact Index Numbers," Economics working papers erwin_diewert-2009-6, Vancouver School of Economics, revised 13 Feb 2009.
    8. Grainger, Corbett & Schreiber, Andrew & Zhang, Fan, 2019. "Distributional impacts of energy-heat cross-subsidization," Energy Policy, Elsevier, vol. 125(C), pages 65-81.
    9. Dusan Paredes Araya & Victor Iturra Rivera, 2013. "Substitution bias and the construction of a spatial cost of living index," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 103-117, March.
    10. Hausman, Jerry, 1999. "Cellular Telephone, New Products, and the CPI," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 188-194, April.
    11. Charles Steindel, 1997. "Are there good alternatives to the CPI?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 3(Apr).
    12. Jan Hanousek & Randall K. Filer, 2003. "Substitution Biases in Price Indexes during Transition," Development and Comp Systems 0306002, University Library of Munich, Germany.
    13. Rafał Nagaj, 2022. "Macroeconomic Policy versus Fuel Poverty in Poland—Support or Barrier," Energies, MDPI, vol. 15(13), pages 1-22, June.
    14. Evens Salies, 2012. "Lin, B., Jiang, Z, 2012. Designation and influence of household increasing block electricity tariffs in China. Energy Policy 42, pp. 164-173: How biased is the measurement of household's loss?," SciencePo Working papers Main hal-02314758, HAL.
    15. Białek Jacek, 2019. "Remarks on Geo-Logarithmic Price Indices," Journal of Official Statistics, Sciendo, vol. 35(2), pages 287-317, June.
    16. Robert S. Martin, 2022. "Democratic Aggregation: Issues and Implications for Consumer Price Indexes," Economic Working Papers 600, Bureau of Labor Statistics.
    17. Kaiser, Mark J., 2000. "Pareto-optimal electricity tariff rates in the Republic of Armenia," Energy Economics, Elsevier, vol. 22(4), pages 463-495, August.
    18. R. A. Somerville, 2004. "Changes in Relative Consumer Prices and the Substitution Bias of the Laspeyres Price Index - Ireland, 1985-2001," The Economic and Social Review, Economic and Social Studies, vol. 35(1), pages 55-82.
    19. Gong, Chengzhu & Yu, Shiwei & Zhu, Kejun & Hailu, Atakelty, 2016. "Evaluating the influence of increasing block tariffs in residential gas sector using agent-based computational economics," Energy Policy, Elsevier, vol. 92(C), pages 334-347.
    20. Stephen J. Redding & David E. Weinstein, 2016. "A unified approach to estimating demand and welfare," CEP Discussion Papers dp1445, Centre for Economic Performance, LSE.

    More about this item

    Keywords

    Energy Production and Transportation; Environment and Energy Efficiency; Energy and Environment; Markets and Market Access; Transport and Environment;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3960. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.