Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272549 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 15922
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The recent global increases in fuel prices threaten the gains in poverty reduction that countries like Paraguay have achieved over the past few decades. Therefore, policy makers must understand the potential distributional impacts of increases in fuel prices to evaluate the implementation of alternative measures that could mitigate these impacts. This paper analyzes the potential effects of fuel prices on poverty and inequality in Paraguay. Using microsimulation methods and based on the Commitment to Equity framework, it estimates the impact of higher fuel prices on welfare, poverty, and inequality based on three scenarios: (a) increases in gasoline prices, (b) increases in diesel prices, and (c) simultaneous increases in gasoline and diesel prices. The results obtained suggest that the total impact of increasing fuel prices tends to be more regressive in Paraguay. At the same time, the results of the simulations indicate small effects on income inequality.
Subjects: 
fuel prices
poverty
inequality
Paraguay
JEL: 
D6
Q4
I3
P36
Document Type: 
Working Paper

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