عنوان

Designing a Policy Reform for Energy Prices in Kuwait: An Empirical Analysis Using Cointegration and Semiparametric Techniques

Number

TL50723

.Language of Text, Soundtrack etc

انگلیسی

Title Proper

Designing a Policy Reform for Energy Prices in Kuwait: An Empirical Analysis Using Cointegration and Semiparametric Techniques

General Material Designation

[Thesis]

First Statement of Responsibility

Alfalah, Osama

Subsequent Statement of Responsibility

Xu, Zhun

Name of Publisher, Distributor, etc.

Howard University

Date of Publication, Distribution, etc.

2019

Text of Note

144 p.

Dissertation or thesis details and type of degree

Ph.D.

Body granting the degree

Howard University

Text preceding or following the note

2019

Text of Note

This dissertation contains six chapters that examine various aspects of energy subsidies and their effects on consumption, and discuss how I have found, using various methods, how income and prices are the main determinants of energy demand in Kuwait.Chapter 1 aims to describe the historical milestones that have marked Kuwait's journey to its current economic state and provides information about the main economic activities in Kuwait, and how oil extraction and production has played a significant role in Kuwait's budget and welfare. An understanding of these events, in addition to reviewing the current economic situation concerning revenue, expenditure, and budget, will act as a good starting point for discussing the economic reforms explained in the following chapters.The objective of Chapter 2 is to investigate the determinants of gasoline demand in Kuwait and to assess their impact on consumption. To do this, I have used the Standard Demand Equation (SDE), the Cointegration Techniques, and the Error Correction Model (ECM) on annual time-series data for Kuwait from 1972 to 2018. I obtained a price elasticity of -0.341 in the long-run, while the short-run price elasticity was insignificant, indicating that the change in prices had minimal or no effect on gasoline consumption in Kuwait. This is because consumers are shifting their consumption from one type of gasoline to another when prices change. I also found that the income elasticity is 0.175 in the short-run and 0.234 in the long-run, indicating that the income change will be more effective in the long-run.Chapter 3 focuses on assessing the impact of subsidy reform for electricity in Kuwait, using the same methods of the previous chapter and covers the period from 1972 to 2016. I found that income and price are essential determinants of residential electricity demand in Kuwait, where the short-run income elasticity is 0.1428. This indicates a positive, but inelastic, relationship between income and electricity consumption in Kuwait. Besides, the long-run price elasticity is -1.7998, showing a negative, yet elastic relationship.In Chapter 4, I use similar methods as for the previous chapters, covering the period from 1965 to 2018, to determine the relationship between fresh water consumption, prices, and income. I found that the price elasticity for fresh water demand in Kuwait was negative and quite high in the short-run (-0.813) and in the long-run (-0.989), which is consistent with the existing literature. I also found that the income elasticity for demand was positive in the long-run (0.0009) but insignificant. However, it was negative in the short-run (-0.0050783).Chapter 5 estimates the price and income elasticities of the demand for gasoline in countries where fuel prices are government-subsidized. I make use of a biennial panel's road-sector data for 32 countries between 1998-2010, finding that the demand for gasoline is price inelastic over both the short- and long-run while income is elastic in most applied regressions. This finding is confirmed by using the semiparametric method to see the moving elasticity over different price and income levels. By applying five regression criteria, I have found that price elasticity ranges from -0.05 to -0.212 over the covered period, while income elasticity ranges from 0.171 to 1.0136.Chapter 6 concludes the theoretical and empirical literature on subsidy reform policies and tools that have been tested in the previous chapters; accordingly, I construct recommendation policies and a road map for policymakers in Kuwait with the support of Universal Basic Income (UBI). I conclude by discussing the challenges, limitations, and suggestions for future research.

Subject Term

Economics

Subject Term

Energy

Subject Term

Middle Eastern Studies

Alfalah, Osama

Xu, Zhun

Howard University

Electronic name

p

[Thesis]

276903

a

Y