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Does Income Affect Climbing the Energy Ladder? A New Utility-Based Approach for Measuring Energy Poverty

Abstract:
Energy poverty measures are gradually becoming less relevant for fast-developing countries, where the energy mix consists of traditional and modern energies. We propose a new approach for measuring energy poverty by modifying the Exact Affine Stone Index (EASI) demand system to include implied disutility of energy use. The disutility arises from the effects of price or income changes and the use of polluting energies. Using data from Vietnam, we found that energy poverty could happen at higher income levels than the level considered in the literature, and higher incomes may not encourage households to climb the energy ladder. However, consuming carbon-intensive fuel does not necessarily mean energy poor.s

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Keywords: Energy poverty, Fuel poverty, Household energy use, EASI demand system, Vietnam, Household living standards survey

DOI: 10.5547/01956574.44.4.lngu

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Published in Volume 44, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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