Record Details

Is There a Case for Fuel Subsidy Removal in Malaysia?

Journal of Economic & Financial Studies

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Title Is There a Case for Fuel Subsidy Removal in Malaysia?
 
Creator Abdul Razak, Nor Azam
Ismail, Russayani
Abdul Hakim, Roslan
 
Subject —
Fuel subsidy; Indirect welfare effect; Malaysia; Subsidy removal.
D63; C81.
 
Description This paper examines the indirect welfare effect of removing fuel subsidy on the Malaysian households. The analysis is based on the price-shifting model developed by Coady and Newhouse (2006) and carried out using the data from the Household Expenditure Survey 2004-2005 and the input-output table 2004-2005. The analysis yields the following key results: a) The removal of fuel subsidy is expected to have a relatively huge indirect welfare effect on the society; b) The indirect welfare effect is expected to be uneven across different broad categories of goods (of which the most affected ones are: i) Food and Non-Alcoholic Beverages, ii) Housing, Water and Electricity; and iii) Transportation); and c) The indirect welfare effect is expected to be uniform across different income-based segments of households. Overall, the findings seem to constitute a case against fuel subsidy removal unless the adverse impact on the three categories of goods is mitigated in some way.
 
Publisher LAR Center Press
 
Contributor —
 
Date 2014-08-20
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Format application/pdf
 
Identifier http://journalofeconomics.org/index.php/site/article/view/54
10.18533/jefs.v2i03.54
 
Source Journal of Economic & Financial Studies; Vol 2, No 04 (2014): August; 01-13
2379-9471
2379-9463
 
Language eng
 
Relation http://journalofeconomics.org/index.php/site/article/view/54/234
 
Coverage Malaysia
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Rights Copyright (c) 2014 Nor Azam Abdul Razak, Russayani Ismail, Roslan Abdul Hakim
http://creativecommons.org/licenses/by/4.0