Journal of Economic Modeling Research

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This paper presents an AHP and FLP model for the allocation of energy subsidies to different economic sectors. To do so, we defined a group of socio-economic criteria that may affected by the allocation of energy subsidies. These criteria are: economic growth, energy intensity, labor intensity, inflation, social cost of air pollutions and distribution of energy subsidy among socio-economic levels. According to calculated weights, we determined the priority of the above mentioned criteria. Also, according to the optimum overall rank of economic sectors, the commercial sector has the highest rank followed by industrial, agricultural and household and transportation sectors. After determining the final coefficients of AHP approach, we determined the allocation of energy subsidies using linier programming approach. We also considerd the change in technology and consumption patterns of household and transportation sectors. Results show that the share of energy subsidies allocated to commercial and transportation sectors should increase to 30.4 and 28.6 percent respectively.

Keywords: Energy Subsidy, Analytic Hierarchy Process, Fuzzy Linear Programming, Socio-Economic Subsectors.

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