Structural Change in the Australian Electricity Industry During the 1990s and the Effect on Household Income Distribution

We develop a framework for estimating the direct and indirect effects on household income of industry changes; it combines a computable general equilibrium model with a microsimulation model in a two-stage simulation procedure. We apply the framework to analysing changes in the Australian electricity industry during 1990s and their effect on household income across households. Almost all income deciles are found to have benefited from the changes but the pattern of effects meant that there was also a small increase in income inequality.