Eiji Satoh , Kaho Hirano , Taiga Sato , Eiki Shimada , Ayana Sumiyoshi , Satoshi Takahashi , Hiroshi Tamaki , Sora Yamamoto , Kakeru Yamaguchi
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Welfare impact of subsidies in oligopolistic markets: Evidence from Japan's gasoline market
This study empirically examines the welfare effect of government subsidies in Japan's oligopolistic gasoline market. We conducted a simulation analysis that incorporated the external costs associated with automobile use. The total deadweight loss from January 2022 to March 2024 was approximately 377.8 billion yen, which suggests that even in oligopolistic markets, lowering prices through subsidies worsens social welfare because of high external costs. Government policies to combat unprecedented gasoline price increases are not sustainable and should be terminated. Rather, gasoline prices should be increased to improve social welfare.
期刊介绍:
Energy policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy conversion, distribution and use as well as reduction of greenhouse gas emissions in order to contribute to climate change mitigation. The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques.
Energy policy is closely related to climate change policy because totalled worldwide the energy sector emits more greenhouse gas than other sectors.