Juggling the basics
How much does an income increase affect energy spending of low-income households in England?
Ray Galvin (University of Cambridge)
Minna Sunikka-Blank (University of Cambridge)
T.M. Croon (TU Delft - Urban Development Management)
More Info
expand_more
Other than for strictly personal use, it is not permitted to download, forward or distribute the text or part of it, without the consent of the author(s) and/or copyright holder(s), unless the work is under an open content license such as Creative Commons.
Abstract
European governments have deployed targeted and untargeted financial support to protect vulnerable households from the impacts of the recent energy crisis. However, there is little knowledge of income elasticity of energy expenditure among households experiencing energy poverty. We therefore examine the link between energy expenditure and household income levels, considering a spectrum of factors including energy poverty status, energy efficiency of homes, and socio-demographics. We use England's official energy poverty definition, ‘Low-income, low-energy-efficiency’, and analyse the government's ‘Fuel Poverty Dataset’ from 2019. We find that, for all income groups, by far the greatest impact on energy expenditure is the dwelling's energy-efficiency rating, followed by floor area. An increase in income has negligible effects on energy expenditure for all income groups, but greatest for those in energy poverty, suggesting that even though most of their energy-oriented financial support is used for other pressing needs, this still offers some relief from energy poverty. We conclude that energy-efficiency improvements in homes would yield the most substantial and enduring financial benefits for these households, highlighting the need for targeted retrofitting policies. Additionally, older homeowners in energy poverty may need help to move into smaller, energy-efficient homes that are less expensive to heat.
help_outline