Measuring the Effect of Fuel Price Changes on Household Consumption in Mexico
Rodriguez Alvarez, Alberto
Wise, Andrew S.
This thesis measures the impact that the liberalization of gas prices by the Mexican Government in 2017 had on the households by answering the following questions: How much does a change in price of fuel affects the consumption expenditures at the household level, particularly those of low income status under the new liberalization scheme? I measure this using an Ordinary Least Squares (OLS) Regression Model on data from the National Survey of Household Income and Expenses by the National Institute of Statistics and Geography of Mexico of 2018 (INEGI, for its initials in Spanish), which includes information on more than 70,000 observations of households in the country and gasoline prices from the Ministry of Energy of Mexico. The research shows that High-Income Households are more affected on indirect expenditures than low income Households.
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