The distributive effects of consumer price control policies 1971-1979
Date
1981-04
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Abstract
The concern to obtain a more equitable income distribution has been present in Philippine public policy. The adoption of consumer price control measures since 1939 to the present has been made with this intention.
Consumer price control policies affect favorably the condition of equity through a control of the prices of basic goods which therefore, redistributes consumption in favor of low-income consumers. This is possible since a larger portion of the expenditures out of income by these low-income consumers goes to expenditures for basic commodities.
The study was concerned, thus, with evaluating the extent to which consumer price control policies redistributed consumption to low-income consumers. Were consumer price control measures implemented during the period 1971 to 1979 successful in obtaining a more equitable distribution of effective purchasing power?
The findings of the study which was based on the analysis of selected consumer price control measures for rice, corn, cooking oil and electricity show that indeed, consumers benefitted from such measures. The distribution of benefits among the consumers reflect a progressive pattern. Hence, low-income consumers captured more of the benefits in comparison to the benefits which reached the middle-income and the high-income consumers.
However, the study can not completely affirm the favorable effect on equity of these measures since its preliminary findings also show that the distribution of the burden of the costs of consumer price control policies was regressive.