{"id":9082,"date":"2025-12-15T20:29:06","date_gmt":"2025-12-15T23:29:06","guid":{"rendered":"https:\/\/aaep.org.ar\/?p=9082"},"modified":"2025-12-15T20:29:07","modified_gmt":"2025-12-15T23:29:07","slug":"the-distributional-impact-of-reversing-a-long-path-of-energy-subsidies","status":"publish","type":"post","link":"https:\/\/aaep.org.ar\/?p=9082","title":{"rendered":"The distributional impact of reversing a long path of energy subsidies"},"content":{"rendered":"<iframe loading=\"lazy\" class=\"wonderplugin-pdf-iframe\" src=\"https:\/\/aaep.org.ar\/wp-content\/plugins\/wonderplugin-pdf-embed\/pdfjslight\/web\/viewer.html?v=2&file=https:\/\/aaep.org.ar\/works\/works2025\/4830.pdf\" width=\"100%\" height=\"600px\" style=\"border:0;\"><\/iframe>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Reversing energy subsidies poses a complex policy challenge, with distributional effects being a central concern since such subsidies are often justified as protection for the most vulnerable households. This paper analyzes the case of the Buenos Aires Metropolitan Area (AMBA) in Argentina, where, after decades of substantial residential energy subsidies, a gradual reduction process has recently begun. A distinctive feature of this reform is the introduction of targeting mechanisms that segment users primarily by self-reported income. The subsidy rollback unfolded in a highly adverse macroeconomic context\u2014marked by currency devaluation and high inflation\u2014which also affected income distribution beyond the tariff adjustments themselves. Using microdata and administrative records, we document that subsidies, historically pro-rich yet progressive, are now better targeted and consequently even more progressive. Both the classification of users and the subsidy amounts assigned to each group reinforced this progressive shift. Nevertheless, the difficult macroeconomic environment has made the path toward improved distributional outcomes non-linear. The Argentine experience offers valuable lessons for other countries facing similar policy challenges.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[29],"tags":[33],"class_list":["post-9082","post","type-post","status-publish","format-standard","hentry","category-anales","tag-aaep-anales-2025"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The distributional impact of reversing a long path of energy subsidies - Asociaci\u00f3n Argentina de Econom\u00eda Pol\u00edtica<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"es_ES\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The distributional impact of reversing a long path of energy subsidies - Asociaci\u00f3n Argentina de Econom\u00eda Pol\u00edtica\" \/>\n<meta property=\"og:description\" content=\"Reversing energy subsidies poses a complex policy challenge, with distributional effects being a central concern since such subsidies are often justified as protection for the most vulnerable households. This paper analyzes the case of the Buenos Aires Metropolitan Area (AMBA) in Argentina, where, after decades of substantial residential energy subsidies, a gradual reduction process has recently begun. A distinctive feature of this reform is the introduction of targeting mechanisms that segment users primarily by self-reported income. The subsidy rollback unfolded in a highly adverse macroeconomic context\u2014marked by currency devaluation and high inflation\u2014which also affected income distribution beyond the tariff adjustments themselves. Using microdata and administrative records, we document that subsidies, historically pro-rich yet progressive, are now better targeted and consequently even more progressive. Both the classification of users and the subsidy amounts assigned to each group reinforced this progressive shift. Nevertheless, the difficult macroeconomic environment has made the path toward improved distributional outcomes non-linear. 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