| 1. |
- Akimaya, Muhammad, et al.
(författare)
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Estimating the Cross-Price Elasticity of Regular Gasoline with Respect to the Price of Premium Gasoline
- 2018
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Ingår i: Journal of Transport Economics and Policy. - : University of Bath. - 0022-5258 .- 1754-5951. ; 52:2, s. 157-180
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Tidskriftsartikel (refereegranskat)abstract
- Gasoline demand has been extensively researched, yet there has been no attempt to estimate cross-price elasticities of different grades of gasoline. Such knowledge will allow accurate determination of the impact of a fuel pricing policy that has different rates of tax or subsidy depending on the gasoline grade. Using monthly data on the Mexican gasoline market from 1999 to 2014, regular gasoline demand is estimated with an ARDL model. Endogeneity of the price and structural break are also investigated. The cross-price elasticity between regular and premium gasoline is found to be 0.875, confirming high substitutability among gasoline with different grades.
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| 2. |
- Akimaya, Muhammad, et al.
(författare)
-
Political power, economic trade-offs, and game theory in Indonesian gasoline subsidy reform
- 2022
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Ingår i: Energy Research & Social Science. - : Elsevier. - 2214-6296 .- 2214-6326. ; 92
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Tidskriftsartikel (refereegranskat)abstract
- Gasoline subsidies distort the gasoline market resulting in inefficiencies and a costly burden in government budget. In Indonesia, they have taken up to 15Â % of the government expenditures that arguably could be better spent elsewhere. Governments are aware of these costs, yet face difficulties in removing the policy. Governments would like to release the subsidy fund for other programs while still maintaining political power. Simultaneously, a reform will reduce the purchasing of the population and thus, it is commonly met with strong public resistance. The general population can influence the government’s decision to carry out a reform by exerting pressure that may affect the country’s political stability. There is a vast economics literature analysing the economic impact from a subsidy reform. Meanwhile, the government’s hesitancy is analysed in the political science literature. We combined these two fields by developing a quantitative game theory model to show the interaction between the government and the general population. The model is based on Indonesian data but provides a framework that can be applied elsewhere. Different policy removal schemes are simulated including completely or partially phasing-out the subsidy with and without compensation. An important take-away from our analysis is that it provides a framework showing governments what they have to quantify in order to make an informed policy decision. Another important implication is that the success of the policy reform is highly dependent on the selectorates trust to the government. It strongly supports the political science recommendations of building trust through transparency and inclusion.
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| 3. |
- Akimaya, Muhammad, et al.
(författare)
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Simulation of price controls for different grade of gasoline : The case of Indonesia
- 2017
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Ingår i: Energy Economics. - : Elsevier. - 0140-9883 .- 1873-6181. ; 68, s. 373-382
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Tidskriftsartikel (refereegranskat)abstract
- A gasoline subsidy is one of the most prevalent strategies for distributing welfare to the people in oil-producing countries. However well-intentioned, the policy will distort the gasoline market with the resulting inefficiencies. Furthermore, the gasoline subsidy takes a great amount of government's budget. Arguably, these funds could be spent elsewhere with a greater impact on economic growth. These governments are aware of the cost of such a policy, yet face difficulties in removing the policy because of strong resistance from the public. This paper looks at the unique case of Indonesia that only provides a subsidy for regular gasoline and in turn proposes an alternative policy that introduces a subsidy for premium gasoline at a lower rate to reduce the overall gasoline subsidy cost. There has yet to be any research that simulates price controls for gasoline with different grades. The aggregate demand for gasoline in Indonesia is replicated using a translog cost calibration approach. Simulations based on the calibrated demand are then performed and the results confirm the existence of potential savings that are largely determined by the cross-price elasticities between regular and premium gasoline. The benchmark scenario, based on a recent study of substitutability between gasoline by grades, results in an 11.5% reduction in subsidy cost of around 950 million USD with a subsidy rate of Rp 2254/liter. Furthermore, the optimal rate of subsidy for premium gasoline results in a reduction of inefficiency as consumers' welfare increase by 6.8 trillion rupiahs (or 560 million USD).
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