Drivers and persistence of energy poverty: An empirical analysis of country and gender heterogeneity in Spain and the Netherlands

Abstract

Energy poverty is spreading quickly in Europe, yet little is known about its dynamics over time. Moreover, there is a lack of cross-country studies on energy poverty dynamics and very low agreement in the literature regarding the role that gender differences may play in energy poverty determination. To close these gaps, we analyze the presence and persistence of energy poverty in Spain and the Netherlands and investigate the moderating role of country and gender heterogeneity. We use a dynamic probit model on a sample of about 55,300 households between 2005 and 2023, obtained from the European Statistics on Income and Living Conditions (EU-SILC). Our findings highlight that energy poverty is persistent in both countries. While Spanish households are more likely to enter into energy poverty than their Dutch counterparts, the probability of remaining energy poor is comparably high for both countries. We find that gender has a moderating role in the probability of entering energy poverty, which is higher for households led by a woman, yet it does not have any significant role in the persistence of energy poverty. Lastly, we conduct a descriptive analysis of energy poverty policy that suggests little effectiveness and targeting ability of discounts on energy bills as an energy poverty policy instrument. To effectively reduce energy poverty, we recommend implementing structural energy poverty policy measures, such as improving the energy efficiency of buildings. We recommend targeting these interventions to vulnerable groups and implementing them even in countries with lower rates of entry into energy poverty.