Abstract
Electricity has played an important role in the economic development of Korea and, thus, has become a critical factor in sustaining the well-being of the Korean people. This study attempts to investigate the impact of electricity price changes on industrial prices and the general price level using input-output (I-O) analysis. To this end, we apply the I-O price model to the 2011 I-O table recently produced by the Bank of Korea, paying particular attention to the electricity sector by considering it as exogenous and then investigating its impacts. The impacts of the electricity price changes on each industrial sector's prices and the general price level are quantitatively derived. For example, the overall impact of a 10% increase in electricity price on the Korean national economy is estimated to be 0.4367%. We also report the results from the model with the electricity sector endogenous and the model with endogenous electricity and labor sectors. This information can be usefully utilized in decision-making regarding price management for electricity.
| Original language | English |
|---|---|
| Pages (from-to) | 1551-1555 |
| Number of pages | 5 |
| Journal | Energy Policy |
| Volume | 61 |
| DOIs | |
| State | Published - Oct 2013 |
Keywords
- Electricity
- Input-output analysis
- Price model