A Reappraisal of Electricity Subsidies and Household Welfare in Brunei Darussalam

IF 0.8 Q3 ECONOMICS Journal of Southeast Asian Economies Pub Date : 2022-05-24 DOI:10.1355/ae39-1e
Koh Wee Chian
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Abstract

Abstract:This paper reassesses the impact of the residential electricity tariff reform implemented in 2012 on the distributional equity and fiscal cost of electricity subsidies in Brunei. Using data from the latest Household Expenditure Survey (HES) conducted in 2015/16, the study estimates that the poorest 20 per cent of households receive 18 per cent of total electricity subsidies, which is considerably larger than the previously estimated share of 11 per cent based on the 2010/11 HES data. This, in part, reflects behavioural changes induced by the reform to an increasing block tariff (IBT), as wealthier households reduce their electricity usage due to higher per-unit costs at higher levels of consumption while poorer households increase their usage as the tariff cost is cheaper in the first consumption block. Concomitantly, the fiscal cost of electricity subsidies has declined by more than 20 per cent following the tariff change. Yet, simulations of alternative reform scenarios show that there are substantial welfare gains and cost savings from refining the IBT structure, using a volume-differentiated tariff, or providing targeted cash transfers. The overarching message is that improving the design of subsidy schemes or introducing targeted transfers can achieve distributional equity and fiscal objectives more efficiently than existing electricity subsidies.
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文莱达鲁萨兰国电力补贴与家庭福利的再评估
摘要:本文重新评估了2012年实施的居民电价改革对文莱电力补贴分配公平和财政成本的影响。根据2015/16年度进行的最新住户开支调查的数据,该研究估计,最贫穷的20%住户获得的电力补贴占总电力补贴的18%,远高于此前根据2010/11年度住户开支调查数据估计的11%。这在一定程度上反映了对不断增加的区块关税(IBT)改革所引起的行为变化,因为较高消费水平的单位成本较高,较富裕的家庭减少了用电量,而较贫穷的家庭则增加了用电量,因为第一个消费区域的关税成本较低。与此同时,在电价调整后,电力补贴的财政成本下降了20%以上。然而,对替代改革方案的模拟表明,通过改进IBT结构、使用量差关税或提供有针对性的现金转移支付,可以获得可观的福利收益和成本节约。总的信息是,改进补贴计划的设计或引入有针对性的转移,可以比现有的电力补贴更有效地实现分配公平和财政目标。
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期刊介绍: The Journal of Southeast Asian Economies (JSEAE) is a peer-reviewed multi-disciplinary journal focusing on economic issues in Southeast Asia. JSEAE features articles based on original research, research notes, policy notes, review articles and book reviews, and welcomes submissions of conceptual, theoretical and empirical articles preferably with substantive policy discussions. Original research articles and research notes can be country studies or cross-country comparative studies. For quantitative-oriented articles, authors should strive to ensure that their work is accessible to non-specialists. Submitted manuscripts undergo a rigorous peer-review process – two reviewers for original research articles and one reviewer for research notes and policy notes. The journal is published three times a year: April, August and December.
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