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Outsized impacts of residential energy and utility costs on household financial distress

Author

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  • Reid Dorsey-Palmateer

    (Western Washington University)

Abstract

Using data from the American Housing Survey, this paper finds that for renters with limited financial resources, higher average residential energy and other utility costs increase the likelihood of various measures of financial distress such as utility cutoffs and missed rent payments by substantially more than an equivalently sized increase in rent/mortgage costs or an equivalently sized decrease in household income. These negative effects of energy and utility costs on financial distress are also noticeably more pronounced for renters than for homeowners. These results are consistent with prospective residents not fully incorporating future residential energy and other utility costs into their housing selection process and suggests that utility costs, dollar-for-dollar, play a larger role in household financial distress than has previously been realized.

Suggested Citation

  • Reid Dorsey-Palmateer, 2020. "Outsized impacts of residential energy and utility costs on household financial distress," Economics Bulletin, AccessEcon, vol. 40(4), pages 3061-3070.
    • Handle: RePEc:ebl:ecbull:eb-19-00747
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I4-P266.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Burlinson, Andrew & Giulietti, Monica & Law, Cherry & Liu, Hui-Hsuan, 2021. "Fuel poverty and financial distress," Energy Economics, Elsevier, vol. 102(C).
    2. FERNÁNDEZ-LÓPEZ, Sara & ÁLVAREZ-ESPIÑO, Marcos & REY-ARES, Lucía, 2024. "Financial Vulnerability Of Low-Income Households: Review Of Scopus And Wos Journals And Future Research Agenda," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 24(1), pages 153-180.

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    More about this item

    Keywords

    financial distress; energy costs; utility costs;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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