IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v91y2024ics0957178724001280.html
   My bibliography  Save this article

Can financial literacy Ease energy poverty? Some Lessons at the household level in China

Author

Listed:
  • Tao, Miaomiao
  • Lin, Boqiang
  • Poletti, Stephen
  • Pan, Addison

Abstract

Energy poverty and financial literacy are two cross-cutting vital dimensions in sustainable global development. This study examines whether and how financial literacy reduces energy poverty at the household level in China. A two-way fixed regression model demonstrates the catalytic role of financial literacy in eradicating energy poverty. Furthermore, this study identifies potential mechanisms between financial literacy and energy poverty from a mediation and moderation perspective. Financial literacy indirectly and robustly mitigates energy poverty by heightening households' future expectations. However, higher financial risk weakens this facilitating effect on households’ future expectations, as increased financial risk destabilizes household finances.

Suggested Citation

  • Tao, Miaomiao & Lin, Boqiang & Poletti, Stephen & Pan, Addison, 2024. "Can financial literacy Ease energy poverty? Some Lessons at the household level in China," Utilities Policy, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:juipol:v:91:y:2024:i:c:s0957178724001280
    DOI: 10.1016/j.jup.2024.101835
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178724001280
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2024.101835?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. Brent, Daniel A. & Ward, Michael B., 2018. "Energy efficiency and financial literacy," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 181-216.
    2. Ren, Yi-Shuai & Kuang, Xianhua & Klein, Tony, 2024. "Does the urban–rural income gap matter for rural energy poverty?," Energy Policy, Elsevier, vol. 186(C).
    3. World Bank, 2020. "Leveraging Islamic Fintech to Improve Financial Inclusion," World Bank Publications - Reports 34520, The World Bank Group.
    4. Ding, Tao & Li, Hao & Liu, Li & Feng, Kui, 2024. "An inquiry into the nexus between artificial intelligence and energy poverty in the light of global evidence," Energy Economics, Elsevier, vol. 136(C).
    5. Kiani, Khurshid M., 2011. "Relationship between portfolio diversification and value at risk: Empirical evidence," Emerging Markets Review, Elsevier, vol. 12(4), pages 443-459.
    6. John Y. Campbell & Howell E. Jackson & Brigitte C. Madrian & Peter Tufano, 2011. "Consumer Financial Protection," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 91-114, Winter.
    7. van Rooij, Maarten & Lusardi, Annamaria & Alessie, Rob, 2011. "Financial literacy and stock market participation," Journal of Financial Economics, Elsevier, vol. 101(2), pages 449-472, August.
    8. Ampofo, Akwasi & Mabefam, Matthew Gmalifo, 2021. "Religiosity and Energy Poverty: Empirical evidence across countries," Energy Economics, Elsevier, vol. 102(C).
    9. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    10. Bertocchi, Graziella & Brunetti, Marianna & Torricelli, Costanza, 2011. "Marriage and other risky assets: A portfolio approach," Journal of Banking & Finance, Elsevier, vol. 35(11), pages 2902-2915, November.
    11. Özbilgin, H. Murat, 2010. "Financial market participation and the developing country business cycle," Journal of Development Economics, Elsevier, vol. 92(2), pages 125-137, July.
    12. Zhong Chu & Zhengwei Wang & Jing Jian Xiao & Weiqiang Zhang, 2017. "Financial Literacy, Portfolio Choice and Financial Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(2), pages 799-820, June.
    13. Shlomo Benartzi & Richard Thaler, 2007. "Heuristics and Biases in Retirement Savings Behavior," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 81-104, Summer.
    14. Luan, Bingjiang & Zou, Hong & Huang, Junbing, 2023. "Digital divide and household energy poverty in China," Energy Economics, Elsevier, vol. 119(C).
    15. Lau, Chi Keung & Gozgor, Giray & Mahalik, Mantu Kumar & Patel, Gupteswar & Li, Jing, 2023. "Introducing a new measure of energy transition: Green quality of energy mix and its impact on CO2 emissions," Energy Economics, Elsevier, vol. 122(C).
    16. Yang, Junhong & Wu, Yu & Huang, Bihong, 2023. "Digital finance and financial literacy: Evidence from Chinese households," Journal of Banking & Finance, Elsevier, vol. 156(C).
    17. Xu, Nana & Shi, Jingye & Rong, Zhao & Yuan, Yan, 2020. "Financial literacy and formal credit accessibility: Evidence from informal businesses in China," Finance Research Letters, Elsevier, vol. 36(C).
    18. Adele Atkinson & Flore-Anne Messy, 2012. "Measuring Financial Literacy: Results of the OECD / International Network on Financial Education (INFE) Pilot Study," OECD Working Papers on Finance, Insurance and Private Pensions 15, OECD Publishing.
    19. Zhang, Ziyu & Shu, Hongting & Yi, Hong & Wang, Xiaohua, 2021. "Household multidimensional energy poverty and its impacts on physical and mental health," Energy Policy, Elsevier, vol. 156(C).
    20. Feng, Xiangnan & Lu, Bin & Song, Xinyuan & Ma, Shuang, 2019. "Financial literacy and household finances: A Bayesian two-part latent variable modeling approach," Journal of Empirical Finance, Elsevier, vol. 51(C), pages 119-137.
    21. Nikolaos D. Philippas & Christos Avdoulas, 2020. "Financial literacy and financial well-being among generation-Z university students: Evidence from Greece," The European Journal of Finance, Taylor & Francis Journals, vol. 26(4-5), pages 360-381, March.
    22. Zhu, Hongge & Fang, Shuyi & Zhang, Shaopeng & Zhang, Xiaolei & Tian, Yuchen, 2024. "Effects of social capital on energy poverty: Evidence from the national key ecological function zones in Northeast China," Energy, Elsevier, vol. 304(C).
    23. Chen, Fuzhong & Hsu, Chien-Lung & Lin, Arthur J. & Li, Haifeng, 2020. "Holding risky financial assets and subjective wellbeing: Empirical evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    24. Ahmed, Abubakari & Gasparatos, Alexandros, 2020. "Multi-dimensional energy poverty patterns around industrial crop projects in Ghana: Enhancing the energy poverty alleviation potential of rural development strategies," Energy Policy, Elsevier, vol. 137(C).
    25. Lee, Chien-Chiang & Yuan, Zihao, 2024. "Impact of energy poverty on public health: A non-linear study from an international perspective," World Development, Elsevier, vol. 174(C).
    26. Oscar Claveria, 2019. "Forecasting the unemployment rate using the degree of agreement in consumer unemployment expectations," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 53(1), pages 1-10, December.
    27. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    28. Wang, Qiang & Kwan, Mei-Po & Fan, Jie & Lin, Jian, 2021. "Racial disparities in energy poverty in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    29. Nave, Juan M. & Oliva, Laura & Toscano, David, 2023. "Financial knowledge and financial behaviour: The moderating role of home ownership," Finance Research Letters, Elsevier, vol. 57(C).
    30. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    31. Jing Xiao & Cheng Chen & Fuzhong Chen, 2014. "Consumer Financial Capability and Financial Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(1), pages 415-432, August.
    32. Richard H. Thaler & Shlomo Benartzi, 2001. "Naive Diversification Strategies in Defined Contribution Saving Plans," American Economic Review, American Economic Association, vol. 91(1), pages 79-98, March.
    33. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    34. Koomson, Isaac & Orkoh, Emmanuel & Ahmad, Shabbir, 2023. "Non-farm entrepreneurship, caste, and energy poverty in rural India," Energy Economics, Elsevier, vol. 127(PA).
    35. Liu, Taixing & Fan, Miaomiao & Li, Youwei & Yue, Pengpeng, 2024. "Financial literacy and household financial resilience," Finance Research Letters, Elsevier, vol. 63(C).
    36. Gawusu, Sidique & Ahmed, Abubakari, 2024. "Analyzing variability in urban energy poverty: A stochastic modeling and Monte Carlo simulation approach," Energy, Elsevier, vol. 304(C).
    37. Pan, Xuefeng & Wu, Weixing & Zhang, Xuyang, 2020. "Is financial advice a cure-all or the icing on the cake for financial literacy? Evidence from financial market participation in China," International Review of Financial Analysis, Elsevier, vol. 69(C).
    38. 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.
    39. Koomson, Isaac & Danquah, Michael, 2021. "Financial inclusion and energy poverty: Empirical evidence from Ghana," Energy Economics, Elsevier, vol. 94(C).
    40. Feng, Xinzhen & Du, Gang, 2023. "Does financial knowledge contribute to the upgrading of the resident's consumption?," Finance Research Letters, Elsevier, vol. 58(PC).
    41. 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.
    42. Cheng, Shulei & Wei, Tianyu & Wang, Feiran & Zhuang, Lu, 2023. "Does financial market participation eradicate household energy poverty?," Energy Economics, Elsevier, vol. 122(C).
    43. Yin, Zhichao & Wang, Rui & Wu, Xi, 2023. "Financial inclusion, natural disasters and energy poverty: Evidence from China," Energy Economics, Elsevier, vol. 126(C).
    44. Wu, Kai & Lu, Yufei, 2023. "Corporate digital transformation and financialization: Evidence from Chinese listed firms," Finance Research Letters, Elsevier, vol. 57(C).
    45. Sinha, Avik & Bekiros, Stelios & Hussain, Nazim & Nguyen, Duc Khuong & Khan, Sana Akbar, 2023. "How social imbalance and governance quality shape policy directives for energy transition in the OECD countries?," Energy Economics, Elsevier, vol. 120(C).
    46. Said, Rabie & Acheampong, Alex O., 2023. "Financial inclusion and energy poverty reduction in sub-Saharan Africa," Utilities Policy, Elsevier, vol. 82(C).
    47. Thérèse Lind & Ali Ahmed & Kenny Skagerlund & Camilla Strömbäck & Daniel Västfjäll & Gustav Tinghög, 2020. "Competence, Confidence, and Gender: The Role of Objective and Subjective Financial Knowledge in Household Finance," Journal of Family and Economic Issues, Springer, vol. 41(4), pages 626-638, December.
    48. Bao, Helen X.H. & Li, Steven Haotong, 2020. "Housing wealth and residential energy consumption," Energy Policy, Elsevier, vol. 143(C).
    49. Miaomiao Tao & Yuhang Zheng & Pierre Failler & Wee Yeap Lau & Lim Thye Goh, 2023. "The Effect of Energy Structure on Pollution Emissions - The Role of Technological Innovation," Asian Economics Letters, Asia-Pacific Applied Economics Association, vol. 4(1), pages 1-7.
    50. Belaïd, Fateh & Bakaloglou, Salomé & Roubaud, David, 2018. "Direct rebound effect of residential gas demand: Empirical evidence from France," Energy Policy, Elsevier, vol. 115(C), pages 23-31.
    51. World Bank, 2020. "Financial Inclusion in Romania," World Bank Publications - Reports 33629, The World Bank Group.
    52. Barnes, Douglas F. & Khandker, Shahidur R. & Samad, Hussain A., 2010. "Energy access, efficiency, and poverty : how many households are energy poor in Bangladesh ?," Policy Research Working Paper Series 5332, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jianling Qi & Huanjiao Li & Feng Ye & Lingjing Zhang & Tianhang Yang & Chengda Yan, 2025. "Powering Rural Prosperity: How Clean Energy Adoption Transforms Comprehensive Welfare of Rural Residents in China," Agriculture, MDPI, vol. 15(4), pages 1-22, February.

    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. Sajid, Muhammad & Mushtaq, Rizwan & Murtaza, Ghulam & Yahiaoui, Dorra & Pereira, Vijay, 2024. "Financial literacy, confidence and well-being: The mediating role of financial behavior," Journal of Business Research, Elsevier, vol. 182(C).
    2. Osvaldo García-Mata & Mariana Zerón-Félix, 2022. "A review of the theoretical foundations of financial well-being," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(2), pages 145-176, June.
    3. Cheng, Zhiming & Smyth, Russell & Zhang, Le, 2024. "Does childhood adversity affect household portfolio decisions? Evidence from the Chinese Great Famine," China Economic Review, Elsevier, vol. 87(C).
    4. Francisco Gomes & Michael Haliassos & Tarun Ramadorai, 2021. "Household Finance," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 919-1000, September.
    5. Silvia Mariela Méndez-Prado & Vanessa Rodriguez & Kevin Peralta-Rizzo & Patricia Everaert & Martin Valcke, 2023. "An Assessment Tool to Identify the Financial Literacy Level of Financial Education Programs Participants’ Executed by Ecuadorian Financial Institutions," Sustainability, MDPI, vol. 15(2), pages 1-24, January.
    6. Ding, Tao & Li, Hao & Liu, Li & Feng, Kui, 2024. "An inquiry into the nexus between artificial intelligence and energy poverty in the light of global evidence," Energy Economics, Elsevier, vol. 136(C).
    7. Umer Mushtaq Lone & Suhail Ahmad Bhat, 2024. "Impact of financial literacy on financial well-being: a mediational role of financial self-efficacy," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(1), pages 122-137, March.
    8. Li Liao & Jing Jian Xiao & Weiqiang Zhang & Congyi Zhou, 2017. "Financial literacy and risky asset holdings: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(5), pages 1383-1415, December.
    9. Chen, Fuzhong & Hsu, Chien-Lung & Lin, Arthur J. & Li, Haifeng, 2020. "Holding risky financial assets and subjective wellbeing: Empirical evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    10. Kadoya, Yoshihiko & Khan, Mostafa Saidur Rahim, 2020. "What determines financial literacy in Japan?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(3), pages 353-371, July.
    11. Pendleton, Andrew & Robinson, Andrew, 2021. "Why walk away from an easy gain in wealth? Evidence from a UK stock option plan," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    12. Fuzhong Chen & Jingxin Lu & Jiaying Li & Wenting Wang & Horlane Bissielou, 2020. "Sustainable Financial Education and Consumer Life Satisfaction," Sustainability, MDPI, vol. 12(3), pages 1-21, February.
    13. Maya KATENOVA & Sang HOON LEE, 2020. "A comparative study of financial literacy, retirement planning and delinquency in payment: the Kazakhstan case Abstract: Financial knowledge is assumed to help people in making good choices in their f," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 11, pages 273-292, June.
    14. Baeckström, Ylva & Marsh, Ian W. & Silvester, Joanne, 2021. "Variations in investment advice provision: A study of financial advisors of millionaire investors," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 716-735.
    15. Cornil, Yann & Hardisty, David J. & Bart, Yakov, 2019. "Easy, breezy, risky: Lay investors fail to diversify because correlated assets feel more fluent and less risky," Organizational Behavior and Human Decision Processes, Elsevier, vol. 153(C), pages 103-117.
    16. Liu, Bofan & Lu, Bin, 2023. "Can financial literacy be a substitute for financial advisers? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    17. Albert Hizgilov & Jacques Silber, 2020. "On Multidimensional Approaches to Financial Literacy Measurement," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(3), pages 787-830, April.
    18. F. J. Callado-Munoz & J. Gonzalez-Chapela & N. Utrero-Gonzalez, 2017. "Analysis of Variance in Household Financial Portfolio Choice: Evidence from Spain," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(5), pages 439-459, October.
    19. Ngoc Duc Lang & Ha Mai Tran & Giang Tra Nguyen & Duc Hong Vo, 2024. "An Untapped Instrument in the Fight Against Poverty: The Impacts of Financial Literacy on Poverty Worldwide," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(2), pages 657-695, September.
    20. Zhou, Yang & Yang, Manfang & Gan, Xu, 2023. "Education and financial literacy: Evidence from compulsory schooling law in China," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 335-346.

    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:juipol:v:91:y:2024:i:c:s0957178724001280. 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: https://www.sciencedirect.com/journal/utilities-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.