Evaluation of Impacts of the Rise in Energy Prices on Costs of Production and Living Expenses in Malaysia

Authors

  • M. Yusof Saari Universiti Putra Malaysia
  • Norhayati Shuja Department of Statistics Malaysia
  • Ismail Abdul Rahman Department of Statistics Malaysia

Keywords:

Costs of production, energy prices, input-output, living costs

Abstract

This paper examines the impacts of increasing energy prices on cost of production and living expenses of households in Malaysia. Analysis was done using an input-output price model that allows for the decomposition of the impacts into direct and indirect effects. An increase in electricity price was found to have minimal impacts on costs of production and living expenses of households. However, if both electricity and petroleum prices increased simultaneously, energy prices would have a considerable impact on production sectors and households. The indirect effect which captures the interdependencies among production sectors is most responsible for the increase in cost of production and living expenses.

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Author Biographies

M. Yusof Saari, Universiti Putra Malaysia

Faculty of Economics and Management, Universiti Putra Malaysia

Norhayati Shuja, Department of Statistics Malaysia

Economic Indicators Division, Department of Statistics Malaysia

Ismail Abdul Rahman, Department of Statistics Malaysia

Agriculture and Environment Statistics Division, Department of Statistics Malaysia

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Published

2013-06-01

Issue

Section

Articles