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Evaluating the Impact of Energy Poverty in a Multidimensional Setting

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  • Erica Delugas
  • Rinaldo Brau

Abstract

We study the relationship between energy poverty and subjective well-being by combining objective and subjective indicators in a multidimensional energy poverty index (MEPI). Using the Italian release of the European Survey on Income and Living Conditions, we first assess the identification power of this index vis-a-vis standard ’affordability’ indicators. Subsequently, we use the MEPI in a simultaneous bivariate ordered probit model accounting for the endogeneity between subjective well-being and energy poverty arising from considering subjective indicators. We find a clear additional role by the subjective indicator in the identification of the energy-poor and a relatively low overlapping degree between MEPI and affordability measures. Likewise, econometric estimations detect sizeable and statistically significant negative effects on life satisfaction as the severity level of the MEPI rises. In contrast, virtually no effects are found with affordability indicators. The impact is substantially smaller when the MEPI only considers the subset of objective indicators.

Suggested Citation

  • Erica Delugas & Rinaldo Brau, 2021. "Evaluating the Impact of Energy Poverty in a Multidimensional Setting," The Energy Journal, , vol. 42(1), pages 39-66, January.
    • Handle: RePEc:sae:enejou:v:42:y:2021:i:1:p:39-66
    DOI: 10.5547/01956574.42.1.edel
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    1. Welsch, Heinz & Biermann, Philipp, 2016. "Measuring nuclear power plant externalities using life satisfaction data: A spatial analysis for Switzerland," Ecological Economics, Elsevier, vol. 126(C), pages 98-111.
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    1. Okorie, David Iheke & Lin, Boqiang, 2022. "Association of energy poverty and catastrophic health expenditure," Energy, Elsevier, vol. 253(C).
    2. Elizabeth Nsenkyire & Jacob Nunoo & Joshua Sebu & Omowumi Iledare, 2023. "Household Multidimensional Energy Poverty: Impact on Health, Education, and Cognitive Skills of Children in Ghana," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 16(1), pages 293-315, February.
    3. Igawa, Moegi & Piao, Xiangdan & Managi, Shunsuke, 2022. "The impact of cooling energy needs on subjective well-being: Evidence from Japan," Ecological Economics, Elsevier, vol. 198(C).
    4. Kahouli, Sondès & Okushima, Shinichiro, 2021. "Regional energy poverty reevaluated: A direct measurement approach applied to France and Japan," Energy Economics, Elsevier, vol. 102(C).
    5. Laldjebaev, Murodbek & Hussain, Azmat, 2021. "Significance of context, metrics and datasets in assessment of multidimensional energy poverty: A case study of Tajikistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).

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