Impact of Mexico's energy reform on consumer welfare
Journal
Utilities Policy
ISSN
0957-1787
Date Issued
2021
Author(s)
Ramírez, José Carlos
Type
Resource Types::text::journal::journal article
Abstract
We study the impact of Mexico's energy reform on the welfare of electricity, liquified petroleum gas, and gasoline consumers between 2010 and 2018. We utilize micro-level data to estimate income and price elasticities. Comparative statics are used to determine subsidy and price influences on consumer surplus. A counterfactual is used to simulate the industry's behavior under non-reform parameters. Data cover ten income deciles and sociodemographic characteristics in the National Survey of Household Income and Expenditure. We conclude that consumers of energy goods in the post-reform experimental group (2014–2018) experienced a welfare gain compared to consumers in the control group (2010–2014) at the expense of alternative social costs related to energy subsidies.