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Title: Kyrgyz energy policy in transition : price reforms and residential electricity demand
Author: Sarkeyeva, Rosanna
ISNI:       0000 0001 3553 1563
Awarding Body: University of Reading
Current Institution: University of Reading
Date of Award: 2007
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In the transition from a centrally planned system to a market economy many former socialist economies launched comprehensive reforms that involved liberalising energy markets. The extent to which energy utilities have been liheralised differs from country to country; in the case of Kyrgyzstan there are still many indications of market distortions due to the persistence of the soft budget constraints. In this context this study investigates possible effects of electricity price reforms on overall welfare, which includes the analysis of electricity demand elasticities, substitutability of electricity, ability and willingness to pay a higher price. The empirical study is based on a representative sample of Kyrgyz households' energy consumption in 1999, which consists of 2993 observations. Results show: first, that households' electricity demand is inelastic with respect to own price changes (-0.59) and to changes in income (0.21). The illustrated net welfare gains from a gradual decrease in electricity subsidy are significant (up to 2% of GDP). Second, there are no strong substitutes for electricity, whereas electricity is the flrst-best substitute of the other energy resources available to ; households. Third, two-thirds of households have a capacity to pay increased electricity prices, while the remaining one-third needs a targeted assistance in order to be able to pay. The most influential factors of the willingness to pay are income, quality ofelectricity supply and payment arrears. Results of this study suggest that efficiency distortions in the Kyrgyz energy market can be alleviated by abolishing subsidies and hardening the budget constraint. Equity concerns are best tackled by replacing subsidies and discounts with more targeted tools, such as direct cash transfers. Its findings are relevant for the current electric,ty sector reform debate because they suggest ample scope for improving the efficiency of electricity utilisation without hurting the poorest part ofthe population.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available