Socio-Economic Analysis of Subsidies (SEAS) simulator

Author: UNDP & PEP

In many developing countries, consumer subsidies represent a high fiscal burden that threatens the stability of public finance equilibria. A large empirical literature shows often the inequitable distribution of subsidies and suggest that they no longer meet their intended objectives of reducing inequality and protecting the most vulnerable. Such findings increasingly reinforce the voices for reforming the current system of universal subsidies, not only for fiscal reasons, but also for better redistribution of wealth. The fiscal space created by the removal of subsidies can be channelled into green investment, correcting environmental externalities, and enhancing social protection programs, especially in the light of the impacts of the COVID-19 pandemic. Most of all, reallocation of subsidies could deliver an important boost to achieving the SDGs.

Although subsidy reform can improve macroeconomic performance and help create fiscal space to finance more productive investments, price changes can generate direct and indirect negative effects on household welfare.

The Socio-Economic Analysis of Subsidies (SEAS) simulator is intended to conduct distributional analysis of consumers’ subsidies and simulations of subsidies reforms. It estimates the impact of subsidies reforms on household welfare, poverty and inequality, and the government budget with or without compensatory cash transfers. It can be applied to energy and food subsidies. SEAS would strengthen the administration’s capacity to design, implement, and continuously update social protection programs.

The Research Team

The SEAS tool was developed by UNDP’s Sustainable Development Goal Integration (SDGi) team with the Partnership for Economic Policy (PEP). PEP is a Southern-led global organisation dedicated to supporting development in the Global South by providing high-quality, locally-generated evidence that informs better decisions in policy and practice.

1. General Information 1
2. Upload Files 2
3. Variables of Interest 3
4. Commodities of Interest 4
5. Run Simulation 5
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General Information

This section allows the user to enter some basic background information. LEARN MORE

Do you have a dataset ready to be used for the simulation?

Select the country for the price change simulation.

Country is required

Year the data to be used in the simulation was collected.

Upload Files

For the direct pricing effect, the user needs to upload a structured dataset created using Household Budget Survey (HBS). Among the key variables to include in the dataset include the following: per capita expenditure, poverty line, population weight, and the household size. It should be noted however, that even without the last two variables the simulation will still run. The remainder of the variables must be disaggregated per capita expenditures on commodities of interest. There should be no missing values for all the variables in the dataset.

Indirect pricing effects require at least one HBS and an Input-Output (I/O) matrix (file). The I/O matrix should be expressed in local currency. Both the I/O data and the HBS data are expressed in the same currency, in nominal terms and for the same year. In general, it will be difficult to obtain I/O tables and HBS data for the same year. This implies that either the HBS, or the I/O data or both will need to be adjusted for prices to make data in nominal terms comparable and for the same reference year before use. Note that the last line of the I/O matrix should be the total value added also called total primary input (total output-total intermediate inputs).

Choose a pricing effect type and upload the necessary data for the simulation:

The impact of a price change on household well-being via the consumption of subsidized products


(This is typically household income and expenditure survey data.)

Choose file or drag and drop file here(CSV file only)
Input file is required Please upload only CSV files

The impact of a price change on household well-being via the consumption of products that are affected indirectly by the change in price of subsidized products


(The simulation of indirect effects requires at least one Household Income and Expenditure Survey Data and an Input-Output (I/O) matrix (file). )

Choose file or drag and drop file here (CSV file only)
I/O Matrix file is required Please upload only CSV files
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Variables of Interest

Insert key variables such as the per capita expenditures or income, the household size, and the poverty line. The source of these variables is the upload survey data.

? *
Total expenditure is required
? *
Poverty line is required
Household weight is required
Household size is required
Data Variables
Marginal approach (linear approximation)
Cobb-Douglas Approach

Commodities of Interest

Specify items subject to price changes for simulation(s):
Variable Names* ? Short Names* ? Q. Unit ? Price Schedules* ? Initial Price* ? Subsidy* ? Final Price* ? Elasticity* ? Matching I/O Sectors ? *
Concerned Sector *  ? Price Change (%) *  ?

Run Simulation

Review Simulation: (You Can Go back to Any Step to Modify Simulation)

Local Currency:
Year of the Household Survey:
Total Expenditure:
Poverty Line:
Household Weight:
Household Size:
Group By:
Reform Approach:

Commodities of Interest:

No. Short Name