IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v83y2024icp29-41.html
   My bibliography  Save this article

Remittances and multidimensional energy poverty of households in Indonesia

Author

Listed:
  • Hasibuan, Irpan Pebri Setiadi
  • Hartono, Djoni

Abstract

Energy poverty remains a significant challenge in developing nations, as exemplified by the situation in Indonesia. The connection between energy poverty and insufficient financial resources to fulfill basic energy requirements is significant. Remittances hold the potential to address energy poverty. This study seeks to explore the contribution of remittances to alleviating multidimensional energy poverty among households in Indonesia. Data for this research are sourced from the Indonesian Family Life Survey (IFLS) from 2007 to 2014. This study uses traditional migrant-sending districts as an instrumental variable to address endogeneity concerns arising from the reverse causality between remittances and energy poverty. The findings indicate that remittances from migrant workers can help alleviate multidimensional energy poverty in Indonesia, as demonstrated by the two-stage least-squares (2SLS) methodology. Households receiving assistance use the funds to increase their energy consumption and alleviate energy deprivation by directing resources toward electricity, appliances, and communication services. Additionally, the study highlights that economic disparities play a role in shaping the relationship between remittances and energy poverty.

Suggested Citation

  • Hasibuan, Irpan Pebri Setiadi & Hartono, Djoni, 2024. "Remittances and multidimensional energy poverty of households in Indonesia," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 29-41.
    • Handle: RePEc:eee:ecanpo:v:83:y:2024:i:c:p:29-41
    DOI: 10.1016/j.eap.2024.05.022
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592624001358
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2024.05.022?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dogan, Eyup & Madaleno, Mara & Taskin, Dilvin, 2021. "Which households are more energy vulnerable? Energy poverty and financial inclusion in Turkey," Energy Economics, Elsevier, vol. 99(C).
    2. Okorie, David Iheke & Lin, Boqiang, 2022. "Association of energy poverty and catastrophic health expenditure," Energy, Elsevier, vol. 253(C).
    3. Djeunankan, Ronald & Njangang, Henri & Tadadjeu, Sosson & Kamguia, Brice, 2023. "Remittances and energy poverty: Fresh evidence from developing countries," Utilities Policy, Elsevier, vol. 81(C).
    4. Agradi, Mawunyo, 2023. "Does remittance inflow influence energy poverty?," Applied Energy, Elsevier, vol. 335(C).
    5. Dong, Xiao-Ying & Hao, Yu, 2018. "Would income inequality affect electricity consumption? Evidence from China," Energy, Elsevier, vol. 142(C), pages 215-227.
    6. Shi, Hongxu & Xu, Hao & Gao, Wei & Zhang, Jinhao & Chang, Ming, 2022. "The impact of energy poverty on agricultural productivity: The case of China," Energy Policy, Elsevier, vol. 167(C).
    7. Barkat, Karim & Alsamara, Mouyad & Mimouni, Karim, 2023. "Can remittances alleviate energy poverty in developing countries? New evidence from panel data," Energy Economics, Elsevier, vol. 119(C).
    8. Peter Heindl, 2015. "Measuring Fuel Poverty: General Considerations and Application to German Household Data," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 71(2), pages 178-215, June.
    9. Simone Bertoli & Francesca Marchetta, 2014. "Migration, Remittances and Poverty in Ecuador," Journal of Development Studies, Taylor & Francis Journals, vol. 50(8), pages 1067-1089, August.
    10. Taylor, J. Edward, 1992. "Remittances and inequality reconsidered: Direct, indirect, and intertemporal effects," Journal of Policy Modeling, Elsevier, vol. 14(2), pages 187-208, April.
    11. Okushima, Shinichiro, 2016. "Measuring energy poverty in Japan, 2004–2013," Energy Policy, Elsevier, vol. 98(C), pages 557-564.
    12. Awan, Ashar & Bilgili, Faik & Rahut, Dil Bahadur, 2022. "Energy poverty trends and determinants in Pakistan: Empirical evidence from eight waves of HIES 1998–2019," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    13. Romero, José Carlos & Linares, Pedro & López, Xiral, 2018. "The policy implications of energy poverty indicators," Energy Policy, Elsevier, vol. 115(C), pages 98-108.
    14. Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2008. "What is the Impact of International Remittances on Poverty and Inequality in Latin America?," World Development, Elsevier, vol. 36(1), pages 89-114, January.
    15. Issahaku, Haruna & Abor, Joshua Yindenaba & Harvey, Simon Kwadzogah, 2017. "Remittances, banks and stock markets: Panel evidence from developing countries," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1413-1427.
    16. Awaworyi Churchill, Sefa & Smyth, Russell & Farrell, Lisa, 2020. "Fuel poverty and subjective wellbeing," Energy Economics, Elsevier, vol. 86(C).
    17. Koomson, Isaac & Danquah, Michael, 2021. "Financial inclusion and energy poverty: Empirical evidence from Ghana," Energy Economics, Elsevier, vol. 94(C).
    18. Papada, Lefkothea & Kaliampakos, Dimitris, 2016. "Measuring energy poverty in Greece," Energy Policy, Elsevier, vol. 94(C), pages 157-165.
    19. Hosan, Shahadat & Rahman, Md Matiar & Karmaker, Shamal Chandra & Chapman, Andrew J. & Saha, Bidyut Baran, 2023. "Remittances and multidimensional energy poverty: Evidence from a household survey in Bangladesh," Energy, Elsevier, vol. 262(PA).
    20. SeyedSoroosh Azizi, 2021. "The impacts of workers’ remittances on poverty and inequality in developing countries," Empirical Economics, Springer, vol. 60(2), pages 969-991, February.
    21. Zhang, Dayong & Li, Jiajia & Han, Phoumin, 2019. "A multidimensional measure of energy poverty in China and its impacts on health: An empirical study based on the China family panel studies," Energy Policy, Elsevier, vol. 131(C), pages 72-81.
    22. Gunningham, Neil, 2013. "Managing the energy trilemma: The case of Indonesia," Energy Policy, Elsevier, vol. 54(C), pages 184-193.
    23. Nguyen, Giang, 2018. "Consumption behavior of migrant households in Vietnam: Remittances, duration of stay, and the household registration system," Journal of Asian Economics, Elsevier, vol. 57(C), pages 1-12.
    24. Anupam Das & Murshed Chowdhury, 2019. "Macroeconomic impacts of remittances in Bangladesh: The role of reverse flows," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 48(3), November.
    25. Sambodo, Maxensius Tri & Novandra, Rio, 2019. "The state of energy poverty in Indonesia and its impact on welfare," Energy Policy, Elsevier, vol. 132(C), pages 113-121.
    26. Christian Dippel & Andreas Ferrara & Stephan Heblich, 2020. "Causal mediation analysis in instrumental-variables regressions," Stata Journal, StataCorp LP, vol. 20(3), pages 613-626, September.
    27. Adams, Richard H., Jr. & Cuecuecha, Alfredo, 2010. "The economic impact of international remittances on poverty and household consumption and investment in Indonesia," Policy Research Working Paper Series 5433, The World Bank.
    28. Nguyen, Canh Phuc & Nasir, Muhammad Ali, 2021. "An inquiry into the nexus between energy poverty and income inequality in the light of global evidence," Energy Economics, Elsevier, vol. 99(C).
    29. J. Taylor & T.J. Wyatt, 1996. "The shadow value of migrant remittances, income and inequality in a household‐farm economy," Journal of Development Studies, Taylor & Francis Journals, vol. 32(6), pages 899-912.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Xiong & Yang, Wanping & Ren, Xiaohang & Lu, Zudi, 2023. "Can financial inclusion affect energy poverty in China? Evidence from a spatial econometric analysis," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 255-269.
    2. Jin, Shunlin & Ma, Teng & Tan, Xinyu, 2024. "Digital financial inclusion and household energy poverty: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 436-456.
    3. Awan, Ashar & Bilgili, Faik & Rahut, Dil Bahadur, 2022. "Energy poverty trends and determinants in Pakistan: Empirical evidence from eight waves of HIES 1998–2019," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    4. Moteng, Ghislain & Raghutla, Chandrashekar & Njangang, Henri & Nembot, Luc Ndeffo, 2023. "International sanctions and energy poverty in target developing countries," Energy Policy, Elsevier, vol. 179(C).
    5. Khalid, Usman & Shafiullah, Muhammad & Chaudhry, Sajid M., 2024. "Does conflict aggravate energy poverty?," Energy Policy, Elsevier, vol. 194(C).
    6. Dogan, Eyup & Madaleno, Mara & Taskin, Dilvin, 2021. "Which households are more energy vulnerable? Energy poverty and financial inclusion in Turkey," Energy Economics, Elsevier, vol. 99(C).
    7. Barkat, Karim & Mimouni, Karim & Alsamara, Mouyad & Mrabet, Zouhair, 2024. "Achieving the sustainable development goals in developing countries: The role of remittances and the mediating effect of financial inclusion," International Review of Economics & Finance, Elsevier, vol. 95(C).
    8. Muhammad Shafiullah & Zhilun Jiao & Muhammad Shahbaz & Kangyin Dong, 2023. "Examining energy poverty in Chinese households: An Engel curve approach," Australian Economic Papers, Wiley Blackwell, vol. 62(1), pages 149-184, March.
    9. Shahzad, Umer & Gupta, Mansi & Sharma, Gagan Deep & Rao, Amar & Chopra, Ritika, 2022. "Resolving energy poverty for social change: Research directions and agenda," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    10. Zahonogo, Windbeneti Arnaud, 2025. "Do tariff reductions alleviate energy poverty? Evidence for Sub-Saharan African countries," Energy Policy, Elsevier, vol. 197(C).
    11. George E. Halkos & Panagiotis-Stavros C. Aslanidis, 2023. "Addressing Multidimensional Energy Poverty Implications on Achieving Sustainable Development," Energies, MDPI, vol. 16(9), pages 1-30, April.
    12. Djeunankan, Ronald & Njangang, Henri & Tadadjeu, Sosson & Kamguia, Brice, 2023. "Remittances and energy poverty: Fresh evidence from developing countries," Utilities Policy, Elsevier, vol. 81(C).
    13. Zhao, Jun & Dong, Kangyin & Dong, Xiucheng, 2024. "How does energy poverty eradication affect global carbon neutrality?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).
    14. Avom, Désire & Bangaké, Chrysost & Kamguia, Brice, 2024. "Does capital flight set Africa as the seat of darkness? Linking capital flight and energy poverty," Energy, Elsevier, vol. 308(C).
    15. Magdalena Cyrek & Piotr Cyrek, 2022. "Rural Specificity as a Factor Influencing Energy Poverty in European Union Countries," Energies, MDPI, vol. 15(15), pages 1-24, July.
    16. Dogan, Eyup & Madaleno, Mara & Inglesi-Lotz, Roula & Taskin, Dilvin, 2022. "Race and energy poverty: Evidence from African-American households," Energy Economics, Elsevier, vol. 108(C).
    17. Ndoya, Hermann & Kamguia, Brice & Nchofoung, Tii N., 2024. "Can the constitutional concentration of power be linked to Africa's energy poverty?," Energy Policy, Elsevier, vol. 194(C).
    18. Ren, Yi-Shuai & Jiang, Yong & Narayan, Seema & Ma, Chao-Qun & Yang, Xiao-Guang, 2022. "Marketisation and rural energy poverty: Evidence from provincial panel data in China," Energy Economics, Elsevier, vol. 111(C).
    19. Onatunji, Olufemi Gbenga, 2024. "Towards achieving inclusive energy in SSA: The role of financial inclusion and governance quality," Energy, Elsevier, vol. 311(C).
    20. Nguyen, Canh Phuc & Nasir, Muhammad Ali, 2021. "An inquiry into the nexus between energy poverty and income inequality in the light of global evidence," Energy Economics, Elsevier, vol. 99(C).

    More about this item

    Keywords

    Remittances; Multidimensional energy poverty; Income inequality; Instrumental variable; Two-stage least square;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:83:y:2024:i:c:p:29-41. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.