Empirical evidence on the incidence and persistence of energy poverty in Australia

Vera-Toscano, Esperanza and Brown, Heather (2022) Empirical evidence on the incidence and persistence of energy poverty in Australia. The Australian Economic Review, 55 (4). pp. 515-529. ISSN 0004-9018

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Abstract

Reducing energy poverty will help improve the nation's health and help achieve sustainability. Using sixteen years of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we study the dynamics, persistence and determinants of energy poverty. Results indicate that energy poverty in Australia is generally a temporary condition, yet a non-negligible share of the Australian population (ranging from 0.41% to 8.1% depending on the energy poverty indicator used) is exposed to persistent energy disadvantage. Thus, examining the dynamics of energy poverty is essential to make sure that policy targets are effective and reach those in need. Single individuals (whether elderly or not), single-parent households and those with a disabled household member are at high risk of persistently experiencing energy poverty in Australia. This is also true for non-working individuals and immigrants from non-English speaking countries. In contrast, highly educated individuals, those living in metropolitan areas and homeowners face lower likelihoods of persistently experiencing energy poverty. Government investment in energy efficiency for houses and apartments is crucial to generate savings in electricity bills, healthier homes and evident reductions in carbon emissions.