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The Casual Nexus between Income and Energy Poverty in EU Member States

Author

Listed:
  • Alfonso Carfora

    (Italian Revenue Agency, via C. Colombo, 00100 Roma, Italy)

  • Renato Passaro

    (Department of Engineering, University of Naples Parthenope, C.Dir. Is C4, 80132 Napoli, Italy)

  • Giuseppe Scandurra

    (Department of Management Studies and Quantitative Methods, University of Naples Parthenope, via Generale Parisi 13, 80134 Naples, Italy)

  • Antonio Thomas

    (Department of Business and Economics, University of Naples Parthenope, via Generale Parisi 13, 80134 Naples, Italy)

Abstract

This paper investigates the presence of a causal relationship between energy poverty and income poverty in the EU Member States through a Panel Vector Autoregressive specification, and controlled with a set of explanatory variables collected from the Eurostat energy database and the OECD environment database for 2007–2018. Deepening the nexus between energy poverty and income poverty is a relevant issue for tailoring policies to tackle poverty and improve the well-being of citizens, supporting the policy makers in the allocation of planned funds provided by the Recovery plan, “Next Generation EU”. The results of the panel VAR model estimation and Dumitrescu and Hurlin test suggest that there will be no change in the long-run equilibrium when income poverty remains constant. Moreover, the reduction in energy poverty is expected to have a positive effect in terms of overall economic poverty reduction. Finally, there is evidence that substituting fossil fuels with renewables helps to reduce energy poverty and widespread poverty due to the leverage effect on economic development as well as to support the achievement of some of the 17 Sustainable Development Goals addressed by United Nations.

Suggested Citation

  • Alfonso Carfora & Renato Passaro & Giuseppe Scandurra & Antonio Thomas, 2022. "The Casual Nexus between Income and Energy Poverty in EU Member States," Energies, MDPI, vol. 15(8), pages 1-16, April.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:8:p:2822-:d:792535
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