Repositorio Institucional Universidad EAFIT ::Examinando por Materia "USUARIOS DE SERVICIOS PÚBLICOS

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Electricity Cross-Subsidies in Colombia : an alternative targeting proposal
(Universidad EAFIT, 2019) Vélez Tamayo, Juan Felipe; Tamayo Castaño, Jorge Andrés
Cross-subsidy systems are universal mechanisms used to transfer income from one sector of the population to another through the price of a given good or service they otherwise wouldn’t had access to it. In Colombia, the current tariff structure for public utilities operates through the use of a stratification system which transfers part of the cost of the kWh from households from the lowest to the highest stratum. Since the stratification system operates based on the estimated value of the home, without any direct real income valuation scheme, it has turned out to be unsuitable as a targeting instrument. This paper proposes an alternative targeting system making primary use of the score used in the Beneficiaries Selection System for Social Programs (SISBEN), among other alternatives; additionally we estimate a series of short-term consumer’s price elasticities, instrumenting final users tariff to country’s hydrological cycles, to evaluate the impact on consumption of those policy shocks for the average household in the 5 main cities of the country.