ABSTRACT
This chapter provides a quantitative assessment of the extent to which higher energy prices have a regressive impact in United Kingdom (UK). It outlines the background to the problem. The chapter discusses the methodology and the data source employed, and sets the simulation results in UK historical context. It then discusses the results of computations for the impact on households of the simulated higher commodity prices, consequent upon higher energy prices. Energy is primarily derived from exhaustible resources, so that efficient allocation over time is taken to imply rising energy prices. Hence there is a presumption that efficiency and equity are conflicting goals for energy policy. The chapter describes the way in which the effects of higher energy prices on the commodity prices facing households were simulated and transformed into index numbers. The data base for simulation is the most recent available set of input-output tables for the UK, that is, those for the year 1974 in Central Statistical Office.
