Title page 1

Contents 4

Abbreviations 6

Acknowledgments 7

Executive Summary 8

ONE. Introduction: why energy cost shares matter 13

1.1. The purpose of this report 15

TWO. Dataset overview 17

THREE. Evolution of energy cost shares 21

FOUR. Energy prices, cost shares, and policy signals 27

4.1. Energy cost share and energy price 28

4.2. Energy cost share and economic activity 31

4.3. Adjustment and absorption over time 32

4.4. Heterogeneity of results 33

4.5. Energy efficiency policies 37

FIVE. Implications for energy subsidy reforms 41

SIX. Conclusions 49

6.1. Summary of main findings 50

6.2. Key takeaways 51

6.3. Areas for future research 53

Appendix 1: Methodology 56

Appendix 2: Datasets 60

Appendix 3: Results including RISE index 64

Appendix 4: Sensitivity analysis 65

References 67

Tables 5

TABLE 2.1. Scope and coverage of the dataset 18

TABLE 4.1. Estimates of the baseline model for energy cost share 29

TABLE 4.2. Heterogeneous response of energy cost shares to price changes 34

Figures 5

FIGURE 3.1. Global end-use energy prices (weighted by energy consumption) and cost shares, across countries with data for the full 40-year period 22

FIGURE 3.2. Relationship between average national energy prices and energy cost shares 23

FIGURE 3.3. Relationship between average energy prices and energy cost shares for groups of countries, based on factors of interest 25

Appendix Tables 60

TABLE A2.1. Scope and coverage of the dataset 60

TABLE A3.1. Models incorporating energy efficiency indices 64

TABLE A4.1. Results for the energy cost shares model (equation 6) across samples 65

TABLE A4.2. Results from the energy cost shares model (equation 6) with varying number of lags for the price variable 66

TABLE A4.3. Results from the energy cost shares model (equation 6) when cross-sectionally demeaning the dependent variable, without... 66